Banks
	 — 
	Question

Lord Barnett: To ask Her Majesty's Government what discussions they have had with the Government of the United States about the proposal to reduce the size of major banks.

Lord Myners: My Lords, I am not sure that my noble friend will find this Answer satisfactory, but Treasury Ministers and officials have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. As was the case with previous Administrations, it is not the Government's practice to provide details of such meetings.

Lord Barnett: I cannot say that I agree or disagree with that, but I thank the Minister anyway for not answering my Question. We had a quite serious debate on this matter yesterday, when we discussed Glass-Steagall and the fact that President Obama has decided to put into practice this proposal, which I know the Minister disagrees with, as do I. In the report were also matters relating to what I referred to yesterday as the Volcker rules, whereby the investment by banks in hedge funds and other toxic assets, which was the major problem causing much of the crisis, would not be allowed. Does he support those rules, as he appeared to do much of the report, other than Glass-Steagall? If he does not, will he kindly tell us why?

Lord Myners: I am sorry that my noble friend felt that I did not answer his Question; I was seeking to be as holpen as possible. The Glass-Steagall Act was replaced by the Gramm-Leach-Bliley Act. The Volcker rule, which comes out of the G30 report that Volcker produced in January 2009, does not go back to or recommend Glass-Steagall. What President Obama has done in picking up part of the G30 report is to talk about limiting the growth of banks' liability base and addressing issues around proprietary training, private equity and hedge funds. Proprietary training, private equity and hedge funds were not part of the problem that brought the world's banking system to its knees. The system was brought to its knees by a combination of the existence of an unregulated shadow banking sector, too much dependence on wholesale funding and, at its very core, bad lending decisions. We are taking action to address those issues through a panoply of responses, but I do not think that the Volcker rule addresses the core problem behind the weaknesses of the world banking system.

Lord Forsyth of Drumlean: My Lords, could the Minister say to the nearest billion how much the major banks contribute in income tax every year to the Exchequer?

Lord Myners: The noble Lord, Lord Forsyth of Drumlean, will of course know that I do not have that information to hand, nor am I sure that I would be able to obtain it, because it is about income tax and would require from the Inland Revenue information on the sources of income tax by occupation, which should not be made freely available to a Minister. However, as I said to the noble Baroness, Lady Valentine, in yesterday's debate, a strong, successful and responsible banking sector is a great national asset. If London and Edinburgh were in Germany or France, those countries would fight to defend the competitive advantage that we have in financial services. This Government will continue to do that and will not burden our banks with a wholly unworkable regulatory system that would distract attention from the purpose of getting credit back into the economy. Nor will we cause continued uncertainty by continuing to open up debates about whether banks should be broken up. That is wholly unwelcome and unsupportive to the economic purpose of this Government and this country.

Lord Lawson of Blaby: My Lords, the Minister got quite carried away. Is he not aware that in the process he was somewhat unfair to his noble friend Lord Barnett? The Volcker rule suggests that deposit-taking banks should be prohibited from a whole range of investment banking activities. That is far more realistic than complicated regulation, firewalls and ring-fences, which, as Paul Volcker said, will not in practice work. Will the Minister say why he disagrees with Paul Volcker on this, which I suspect is a disagreement that he also has with Jean-Claude Trichet and the Governor of the Bank of England?

Lord Myners: I have read the G30 report very carefully. I have also read the op-ed contribution by Paul Volcker in the New York Timeson 30 January. It is very clear to me that he does not propose a return to Glass-Steagall. At the core of his recommendations around proprietary trading is the importance of ensuring that banks meet customer needs and that, to the extent that that involves carrying trading risk, they must be appropriately capitalised and with appropriate liquidity requirements. That is absolutely spot on with the line that we have been taking.

Lord Newby: The House is now absolutely clear about the Minister's view about breaking up the banks in terms of reducing risk to the banking sector. Does the Government believe that there is too great a concentration of power in too few retail banks as a result of events over the past couple of years? Are the Government planning to do anything to increase the degree of competition on the high street for retail deposits?

Lord Myners: As the noble Lord, Lord Newby, knows, we have spoken to this issue. The increased consolidation in banking is a global phenomenon; the Herfindahl index of industry concentration shows an increase across all global economies in the banking sector. We want to see more competition and we want to see the competition that is already in place operating effectively. I believe that it is-banks are competing in a competitive way for lending propositions. That was very evident to me this morning when I met the chief executives, or their deputies or nominees, of all our major banks to talk about the competitive environment. We are also encouraging new competition through Northern Rock. Incidentally, we announced this morning that we are removing the state guarantee from Northern Rock deposits three months from today. We will ensure, as a consequence of our negotiations with the EU, that the disposals that are to be made by Lloyds and RBS will facilitate the emergence of new entrants into the banking sector. We are also encouraging companies such as Tesco in their efforts to become a significant force in UK banking. I agree with the basic premise of the noble Lord, Lord Newby, that we are wavering to a point where there is perhaps not enough competition in high street banking.

Lord Burnett: My Lords, on tax information available to Ministers, has the Treasury commissioned a study to examine how much tax would be received by the UK Treasury if every £1 million paid in bonuses was instead retained by the international bank paying the bonus?

Lord Myners: The issue of the taxation of bonuses will involve corporation tax, bank payroll tax and personal income tax. It is therefore an extremely difficult calculation to make and certainly not one that I can do in my head. I do not think that I will be able to provide the noble Lord with the answer that he seeks, but I will endeavour to do so.

Agriculture: Dairy
	 — 
	Question

The Lord Bishop of Wakefield: To ask Her Majesty's Government what plans they have to develop the sustainability of the dairy sector following the publication of the strategy Food 2030.

Lord Davies of Oldham: My Lords, our goal is a dairy sector that produces for the market and is profitable, thriving and competitive. It should meet consumer needs while protecting and enhancing the natural resources it depends on to safeguard our future production. We work closely with the dairy industry through the Dairy Supply Chain Forum to develop the milk road map, and contribute to the debate in the high-level group in Brussels.

The Lord Bishop of Wakefield: My Lords, one could ask questions on this subject till the cows come home.

Noble Lords: Oh!

The Lord Bishop of Wakefield: I thank the Minister for his kind reply. At present, however, the costs of production are more than the price that many milk producers are getting for it. What additional measures are being put in place, alongside the emergency measures of the dairy fund, for the future continuance of the dairy industry?

Lord Davies of Oldham: My Lords, the emergency measures are important, but I think that the right reverend Prelate will appreciate, as will the whole House, that we are concerned that the dairy industry should establish itself for a profitable future. That means larger herds and a concentration of dairy production. We welcome the fact that Europe is thinking along the same lines. As we are better placed than many other European countries' dairy industries, we look forward to improved fortunes for the dairy industry in the future.

Lord Davies of Coity: My Lords, I wonder whether the Minister agrees that to ensure the future sustainability of the dairy sector, we should re-establish the Milk Marketing Board?

Lord Davies of Oldham: My Lords, this Government always go forward rather than back.

Lord Plumb: My Lords, I speak as an ex-dairy farmer. Does the Minister share my concern and understand the anger of many dairy farmers throughout the land who have seen their herds decimated through bovine TB? Forty thousand cattle with TB were lost or slaughtered last year; I think it was 41,000 the year before. And so it goes on. And so it will go on this year. Some of those animals and herds have been totally decimated. One can therefore understand the reaction. What is the cost to the taxpayer of dealing with the problem? Furthermore, what is the cost to the nation of the loss of production of both milk and dairy products that could be produced in this country, when we are in fact importing millions of litres of milk which would be totally unnecessary if only this disease could be got under control?

Lord Davies of Oldham: As the noble Lord will know, we also export a considerable amount of milk. However, I entirely accept his point. The Government are greatly concerned with exactly the issue he identifies-the horrors that bovine TB visits on the dairy herd and, in fact, cattle in this country. If we thought that there was one straightforward answer that would solve the problem, the Government would of course leap on it. We are all too well aware of the agony of the situation for farmers and of the costs to the country. However, I emphasise that there is no clear evidence that the culling of badgers will solve the problem; in fact, the process of culling might make the problem more difficult. However, we are carrying out a project to trap and vaccinate badgers in six areas in England which have a high incidence of bovine TB in cattle. We are also watching the Welsh experiment, where a badger cull is being carried out in a limited area. We are of course open to persuasion that progress could be made along those lines.

Lord Greaves: My Lords, the Government recently announced the appointment of an ombudsman to deal with relationships between supermarkets and their suppliers. How long will it be before this ombudsman is able to take action that results in dairy farmers being paid a fair price for their milk by all the supermarket chains?

Lord Davies of Oldham: My Lords, the Minister in the Commons, my right honourable friend Jim Fitzpatrick, already chairs a dairy industry supply chain forum which meets twice a year and has gone some way to tackling some of these issues. The noble Lord has identified a very important issue indeed: the relationship between the power of the supermarkets and producers in this country, which affects the dairy industry as much as it does other industries. That is an issue on which, as he indicated, our proposal with regard to the ombudsman is designed to make progress.

Baroness O'Cathain: Does the Minister really think that having his right honourable friend chair a meeting twice a year will satisfy those poor dairy farmers? Does he know how many dairy farmers leave the industry each week? That is the problem: two meetings a year. It is not good.

Lord Davies of Oldham: My Lords, we appreciate the difficulties of the dairy industry: we are all too well aware of the collapse of a significant part of the industry last year. However, I emphasise to the noble Baroness that there are very good reasons why we should believe in the growing prosperity of the industry against a background in which it becomes increasingly market-competitive. It is quite clear that, whereas others have had an advantage against us through the existing subsidies of the old CAP regime, Europe is changing on that perspective, from our persuasion. We will be better placed to take advantage of the future regime.

Pay Restraint
	 — 
	Question

Lord Sheldon: To ask Her Majesty's Government what action they are taking to influence those in the public and private sectors to agree to pay restraint.

Lord Myners: My Lords, the Pre-Budget Report 2009 announced that across the public sector the Government would be seeking a 1 per cent cap on basic pay uplifts for 2011-12 and 2012-13. The Government are also seeking to limit uplifts to 1 per cent in 2010-11 for key public sector workforces not in multi-year deals. In the private sector, the Government have a role to play in preventing undesirable practices. However, in general, private sector remuneration arrangements are a matter for employees, directors, the employees' unions and those involved in the negotiation of agreements.

Lord Sheldon: My Lords, I thank the Minister for that reply, which was very useful. However, the public and private sectors have in the past been influenced in different ways by the Government, industry and the public. Do we not need an even closer agreement, particularly over the next four years, than we have had in the past? Also, what is the Minister's reaction to waivers by Varley, Hester and Daniels? Does he expect other bankers to follow their example?

Lord Myners: I thank my noble friend for his two questions. Since 1997, public sector earnings have increased by 27 per cent in real terms, and private sector earnings by 21 per cent. Public sector wages have increased, but that is after a period in the 1980s and 1990s when public sector pay lagged significantly behind the private sector. This led to considerable problems of morale among those working in the public sector, who felt that their contribution was not being recognised and was being denigrated. That has now been adjusted; there is no difficulty in recruiting and retaining people in the public sector. I would expect pay awards across all forms of employment to take account of the economic reality.
	I commend those bankers who have volunteered to waive their bonus grants. My noble friend named them. The onus will now fall on Mr Stephen Green at HSBC and Mr Peter Sands at Standard Chartered to conclude whether they, too, should waive any bonus entitlement that they might be granted.

Baroness Noakes: Given the size of the deficit, why should public sector pay increase at all?

Lord Myners: We have made it clear that people are entitled to be appropriately rewarded, but we believe that that can be achieved within a regime of restraint which we expect to be evidenced in the private and public sectors. As such, we have set a target of 1 per cent over the next two years. That is an appropriate degree of restraint and we expect public sector employees to act accordingly.

Lord Tomlinson: Does my noble friend agree that rather than just concentrating the discussion on pay restraint, we ought equally to emphasise the need for improvements in productivity? What really matters is the unit cost of production and the quality of services being provided in many areas of the public service. We must be at least equally concerned about productivity increases, and not concentrate just on restraining pay.

Lord Myners: I entirely agree with my noble friend, and that applies to both the public sector and the private sector.

Baroness Williams of Crosby: Does the Minister agree that a tax system that falls very heavily on the lowest paid, who in this country start paying taxation before their income reaches even £10,000 a year, is not helpful in trying to achieve pay restraint, and that a system which allows so many people to place their money in offshore havens is not conducive to pay restraint?

Lord Myners: There were many nuances in the question of the noble Baroness, Lady Williams. Of course, this Government have done a great deal to protect the most vulnerable in society through benefits and credits, in addition to supporting a progressive tax system. Our approach is to ensure that the tax system works to the benefit of the many and can be contrasted with the approach of those on the opposition Benches whose first priority on tax is to abolish child trust funds in order to allow multi-millionaires further protection against taxation on inheritance. That is a lamentable policy which will be rejected by the nation.

Lord Lea of Crondall: My Lords, the hypothesis coming from the Opposition Front Bench on this seems to be: public sector, bad; private sector good. Does my noble friend believe that there is a free market in the private sector when remuneration committees at the top end of business all want to be in the top quartile of earners, all scratch each others backs and thus create growing inequality in the country? This is not a free market; it is a sort of ramp for those who set each others' pay at the top end of many of these organisations.

Lord Myners: I am much encouraged by what has been happening in the private sector where there has been a move towards much more restraint. Remuneration committees, aided and supported in their effort by shareholders, are now asking far more challenging questions about the advice that they receive from remuneration consultants. But it is an observable fact that over the past 30 years, for no obvious economic justification, the rewards of those at the very top of industry and commerce have grown exponentially compared with the rewards elsewhere in the workforce.

Lord Tebbit: Can the Minister turn his attention back to the question asked by the noble Baroness, Lady Williams? Is it not true that at the bottom of the stack, in that crucial area where total income is between about £5,000 and £10,000 a year, those who seek to get away from benefits and back into work suffer higher rates of loss of their money through tax, national insurance and benefit loss than any of the wealthy are prepared to pay, even under this Government?

Lord Myners: I thought when the noble Lord, Lord Tebbit, said that he was going to redirect me back to the question of the noble Baroness, Lady Williams, it would be about those in offshore locations. I could not for a minute understand why the Opposition Bench would be inviting me to address people in tax havens offshore and their political contributions. I agree with the noble Lord that any tax system that has a regressive kink in it as a result of people coming out of benefit is less than perfect, and we have worked assiduously to address those concerns, although the experience of Governments throughout the world and in this country is that there will always be anomalies. We should always seek to address those whenever we can; we should not deter people from self-sufficiency and withdrawing from benefit to earn an honest day's crust with the self respect and esteem that flows from that.

Eurostar
	 — 
	Question

Earl Attlee: To ask Her Majesty's Government what assessment they have made of the ability of Eurostar to plan for serious operational challenges.

Lord Faulkner of Worcester: My Lords, my noble friend the Secretary of State for Transport has today issued a Written Ministerial Statement welcoming the Eurostar independent review, which looked into the collapse of Eurostar services before Christmas and was published on Friday 12 February. It was a tough and thorough review and contained specific criticism of Eurostar's contingency planning.
	Ministers have requested Eurostar to present a further report to both UK and French Governments by the end of March explaining what measures the company has taken towards implementing these recommendations. Eurostar has committed to do this.

Earl Attlee: My Lords, I thank the Minister for that full reply. Noble Lords will recognise that it is not possible to anticipate every technical failure in a complex transport system. I do not want to get bogged down in the detail but it is clear that Eurostar and Eurotunnel have failed to undertake a proper risk assessment. Why have the Government failed to identify and correct this?

Lord Faulkner of Worcester: I was about to thank the noble Earl for the first half of his Question, and I agree that it is not possible to plan for every eventuality, but if I may say so the second half of his Question is a little unfair. The issues he raises are covered in great detail in the report produced by Christopher Garnett and Claude Gressier, which I commend to him. He may be aware that in May this year Eurostar is moving to a single unified structure instead of a joint venture between three railways, which we believe will address a number of the issues to which he refers.

Lord Grenfell: My Lords, I declare an interest having been through the Eurostar tunnel more than 1,100 times since its inception for a reason that might not commend itself to all Members of the House. I have been stuck twice in the tunnel and five times in open country, which is a pretty good record. Am I right in thinking that at its inception there was an understanding that after 10 years of operation an element of competition should be considered, to provide an even better service? I do not know whether that means a new tunnel, but if there is to be one I would welcome it as I am bored with going through this one and would love to go through another.

Lord Faulkner of Worcester: I do not know whether there will be a new tunnel but there will be an open access arrangement for the running of Eurostar services in future. From the early part of this year the tunnel has been available for open access operators and we are looking forward to applications from other railway companies which may wish to provide services through the tunnel. I am pleased that my noble friend referred to his record of its operation. As the review report says, when Eurostar operates well, passenger satisfaction is high. Reliability has improved from one incident per 20,000 kilometres to one per 67,000 kilometres. Although things go wrong from time to time it is rare and over the 15 years of its operation it has achieved very high levels of customer satisfaction.

Baroness Hanham: On the question of risk assessment, the review indicates that well over £12 million to £15 million will have to be spent on communications. It is remarkable that the communications system has been so bad for all these years. Does the Minister have any idea what assessment was undertaken of the communications that might be necessary between the ground, the train and passengers so as not to end up with the debacle that there has been in the past few weeks?

Lord Faulkner of Worcester: The noble Baroness is right. Communication was one of the major failings which the review identified. There were 21 recommendations in that review, split into three areas: train reliability; evacuation and rescue; and thirdly, managing disruption and improving communication. A significant number of improvements is under way in respect of communication. Although it was unpleasant for the people involved in the incident at the weekend, the communication on the train which broke down on Sunday was dramatically better than that on the trains before Christmas. Lessons were clearly learnt, and Eurostar is improving.

Lord Bradshaw: Any transport system has breakdowns; the important thing is how they are dealt with. Can the Minister give the House any assurance that, having decided how such incidents are going to be handled in future, proper arrangements are in place for regular rehearsals, so that when something happens staff know what to do? It is no good doing it once off; it has to be done repeatedly.

Lord Faulkner of Worcester: I agree completely with the noble Lord. That issue is addressed in the review, and Eurostar has committed to undertake staff training of precisely the sort he has described.

Lord Corbett of Castle Vale: Is my noble friend aware that we in the West Midlands are anxiously awaiting a direct Eurostar service in and out of the city of Birmingham-either on the existing west coast main line or the proposed high-speed line? In that connection, can he confirm that the Conservative-led councils of Birmingham and Solihull have welcomed government proposals for a high-speed line, in spite of the opposition of Her Majesty's Opposition in another place?

Lord Faulkner of Worcester: Yes, my Lords, we are a little puzzled by the attitude of the official spokesman for the Conservative Party in the other place, who has claimed to be a great supporter of High Speed 2. The Conservative-controlled councils of Birmingham and Solihull, and indeed those of Hammersmith and Fulham and Leeds, have all met my noble friend and been extensively briefed on the High Speed 2 proposals. I am happy to say that the Liberal Democrat spokesman will be briefed by my noble friend on High Speed 2 next week.
	This project deserves all-party support. As the leader of Manchester council said in a letter to the Guardian only this week:
	"If there is one area where we sorely need political consensus, it is planning a high-speed rail network. ... Regardless of the temptations offered by the coming general election, HSR\\UK calls on all the parties to put aside their short-term political considerations and look to the long-term economic future of our nation".

Business of the House
	 — 
	Motion on Standing Orders

Moved By Baroness Royall of Blaisdon
	That Standing Order 47 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 2 March to allow the Corporation Tax Bill to be taken through its remaining stages that day.
	Motion agreed.

Welsh Zone (Boundaries and Transfer of Functions) Order 2010

Environmental Permitting (England and Wales) Regulations 2010

Legislative Reform (Dangerous Wild Animals) (Licensing) Order 2010

Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010

Code of Audit Practice 2010 for Local Government Bodies

Code of Audit Practice 2010 for Local NHS Bodies
	 — 
	Motion to Refer to Grand Committee

Moved By Baroness Royall of Blaisdon
	That the draft orders be referred to a Grand Committee.

Baroness Royall of Blaisdon: My Lords, with the leave of the House I beg to move the six Motions standing in my name on the Order Paper.

Lord Strathclyde: My Lords, can the Leader of the House tell us if she expects these orders to be agreed by the House before the Easter Recess? In that context, is she willing to give us the dates of the Easter Recess?

Baroness Royall of Blaisdon: My Lords, I certainly expect these orders to be agreed by the House before the Easter Recess, but I am afraid I cannot enlighten the noble Lord or the House as to the date of the recess as yet.
	Motion agreed.

Asylum (Designated States) Order 2010
	 — 
	Motion to Approve

Moved By Lord Brett
	That the draft order laid before the House on 6 January be approved.
	Relevant document: 4th report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 February.
	Motion agreed.

Occupational Pension Schemes (Levy Ceiling) Order 2010

Pension Protection Fund (Pension Compensation Cap) Order 2010
	 — 
	Motion to Approve

Moved By Lord McKenzie of Luton
	That the draft orders laid before the House on 11 January be approved.
	Relevant documents: 6th report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 February.
	Motion agreed.

Welfare of Racing Greyhounds Regulations 2010

Access to the Countryside (Coastal Margin) (England) Order 2010
	 — 
	Motion to Approve

Moved By Lord Davies of Oldham
	That the draft orders laid before the House on 13 and 20 January be approved.
	Relevant documents: 5th and 6th reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 9 February.
	Motion agreed.

Child Migration
	 — 
	Statement

Baroness Royall of Blaisdon: My Lords, with the leave of the House, I shall repeat a Statement made in the other place by my right honourable friend the Prime Minister. The Statement is as follows.
	"With permission, Mr Speaker, I wish to make a Statement. Until the late 1960s, successive UK Governments had over a long period of time supported child migration schemes. This involved children as young as three being transported from Britain to Australia, Canada, New Zealand, South Africa and Zimbabwe.
	It was hoped that these children, who were aged between three and 14, would have the chance to forge a better life overseas. But the schemes were misguided. In too many cases, vulnerable children suffered unrelenting hardship and their families left behind were devastated. They were mostly sent without the consent of their mother or father. They were cruelly lied to and told they were orphans-that their parents were dead when in fact they were still alive. Some were separated from their brothers and sisters, never to see one another again. Names and birthdays were deliberately changed so that it would be impossible for families to reunite. Many parents did not know that their children had been sent.
	The former child migrants say they feel that this practice was less transportation and more deportation: a deportation of the innocents. And when they arrived overseas, all alone in the world, many of our most vulnerable children endured harsh conditions, neglect and abuse in the often cold and brutal institutions which received them.
	Those children were robbed of their childhood-those most precious years of life-and the pain of a lost childhood can last a lifetime. Some still bear the marks of abuse; all still live with the consequences of rejection. These wounds will never fully heal, and for too long the survivors have been all but ignored.
	When I first was made aware of this wholly unacceptable practice, I wrote to the Prime Minister of Australia to urge that we do more to acknowledge the experiences of former child migrants. It is right that today we recognise the human cost associated with this shameful episode of history-this failure in the first duty of a nation: to protect its children.
	Shortly, I shall be meeting a number of former child migrants here in the Palace of Westminster to listen first hand to their experiences. And as Prime Minister I will be apologising on behalf of our nation.
	To all those former child migrants and their families, to those here with us today and those across the world-to each and every one-I say today we are truly sorry. They were let down. We are sorry that they were allowed to be sent away at the time when they were most vulnerable. We are sorry that, instead of caring for them, this country turned its back. We are sorry that the voices of these children were not always heard, their cries for help not always heeded. And we are sorry that it has taken so long for this important day to come and for the full and unconditional apology that is justly deserved.
	I should like to recognise the work of the Member for Rother Valley as chair of the Health Select Committee and of his predecessor, the former Member for Wakefield. And, for their commitment to this cause, I should also like to praise all past and present members of the Commons Health Select Committee and the All-Party Group on Child Migrants.
	I should also like to pay tribute to the work of the Child Migrants Trust and the International Association of Former Child Migrants and their Families, which have campaigned for justice over many years. And I know that the House will join me in paying special tribute to Margaret Humphreys, who founded the Child Migrants Trust and who has been a constant champion of, and fighter for, child migrants and their families.
	Although we cannot undo the events of the past, we can take action now to support people to regain their true identities, to reunite with their families and loved ones, and to go some way to repair the damage inflicted. I can announce today support for former child migrants. This includes the establishment of a new £6 million family restoration fund.
	There are many painful memories as a result of the child migration schemes and, for many, today's apology will come too late for them to hear it. We cannot change history but I believe that, by confronting the failings of the past, we can show that we are determined to do all we can to heal the wounds. I commend this Statement to the House".

Lord Strathclyde: My Lords, I thank the noble Baroness for repeating the Statement made by the Prime Minister. I fully associate this side with that full and whole-hearted apology, as has my right honourable friend David Cameron. We also join the noble Baroness in sending those very sincere apologies to those affected who are attending all the events today. We share the respect rightly accorded to Margaret Humphreys and the Child Migrants Trust. They have not been able to reverse injustice but they have made sure that it has been exposed and some wrongs righted. I also welcome the family restoration fund that has been announced.
	All governments of all parties do things, or turn a blind eye to things, of which they should be ashamed. Perhaps we brazen things out too much without admitting our mistakes. That does not serve politics in general. It is always easier to apologise for past events for which we were not responsible. In this profoundly shocking case in which many of those affected are still alive it is right that we should publicly atone for the lies, abuse and cruelties involved and apologise unreservedly.
	We should judge a society on how it cares for its most vulnerable, especially its children. We must do all we can to make sure that the lessons from these appalling events are learnt and applied so that nothing like this can ever happen again. I am sure that the whole House will unite behind these sentiments.

Baroness Barker: My Lords, on behalf of these Benches I thank the noble Baroness, Lady Royall, for repeating the Statement. I am very glad to be able to respond to it on behalf of these Benches and I say that for one reason. Quite by chance one night I happened to flick on to a television programme about Margaret Humphreys and the establishment of the Child Migrants Trust. I commend that programme to Members of the House. It was one of the most searing television programmes that I have ever seen and it sparked my continuing interest in this issue.
	As the noble Lord, Lord Strathclyde, said, governments atone for things that have occurred well in the past and they do their best to make amends. I welcome very much the establishment of the family restoration fund. That will enable many people to visit their existing families and, in some cases, it will enable them to visit grave sites. The damage that we are talking about is that searing.
	I vividly remember listening to a gentleman in the programme who had done very well for himself and his new life in Australia and had made a lot of money. With that money he bought all the Beatles memorabilia that he could find because the only thing that he knew about himself was that he came from Liverpool. That goes right to the heart of this question. The single most important thing to these people who are now adults is to know their identity. There is one particular thing that this Government could do to enable them to achieve that. That is to change the law on access to care records for former care adults. It applies to adults who were in care as children in this country too and is a matter that I have raised with successive ministers in this House.
	If the Government feel that they cannot do that, will they ensure that every social services department in the land has a copy of Access to Information for Post-CareAdults: A Guide for Social Workers and Access to Records Officers, which has been produced by a lady called Julia Feast, an expert in this field, who works for BAAF. It enables social care workers today to understand the good practice that they should follow in enabling people to deal with the hurt of not knowing their identity and having their identities concealed from them for so long as they have been in the past. Were the Government to take that step it would be as profound in its effect as the establishment of the fund and would make this sincere commitment to make things better in the future all the more worth while.

Baroness Royall of Blaisdon: My Lords, I am very grateful to the noble Lord, Lord Strathclyde, and to the noble Baroness, Lady Barker, for associating themselves with the apology. I am also grateful for their welcome for the family restoration fund. I take on board the points made by the noble Baroness. However, I cannot change policy at the Dispatch Box in relation to access to care records but it would seem to be a very good idea to ensure that social services departments have a copy of that good practice document. I certainly undertake to follow that up.
	Perhaps I may commend to noble Lords an exhibition in Westminster Hall about child migrants, which I visited this morning. It is very informative and deeply moving. I urge all noble Lords to have a look at it.

The Lord Bishop of Leicester: My Lords, I speak for this Bench in saying how deeply moved we are by the stories of former child migrants who were deported to the colonies as part of the misguided policies of the 20th century and in affirming the Prime Minister's view that the first duty of the nation is to protect its children. We, for our part, recognise, respect and express our gratitude for the Prime Minister's apology. The events described in the Prime Minister's Statement are a reminder of how people of good will, sometimes acting with the best of intentions, can have unintended, dire consequences for other people. That is why it is so important for Governments always to pay careful attention to the consequences of legislation or initiatives that they take.
	Perhaps I may speak as the chair of the Children's Society trustees in acknowledging the regret of some 30 charities and private bodies which agreed to migrate children abroad, acting out of what seemed like the best intentions at the time. I know that the Children's Society and some other charities now offer a service to child migrants to help them to gain access to their records and after-care counselling. Can the Minister assure the House that the conditions which allowed that gross injustice to be perpetrated although those years ago could not conceivably be repeated under any circumstances today?

Baroness Royall of Blaisdon: My Lords, I am grateful to the right reverend Prelate for the support of his Benches. He is absolutely right to say that we, as a Government and as legislators, must pay attention to the consequences of legislation. As the noble Lord, Lord Strathclyde, said earlier, we have to learn from our past mistakes and I hope that is exactly what we are doing today. I trust that we would never, ever repeat what was done in the past in our name but give a firm undertaking that that would not happen. I trust that it will not happen and I am sure that all in this House will do everything we can to ensure that it will not happen again.

Lord Martin of Springburn: My Lords, I welcome the apology. I have met Margaret Humphreys and many former child migrants who came to the Palace of Westminster. I know the good work that she has done. I also know that money cannot compensate for the terrible things that happened to the children who were sent to Australia, Canada and the former Rhodesia. Is it Her Majesty's Government's intention to pay compensation to those former child migrants?

Baroness Royall of Blaisdon: My Lords, we have not spoken about compensation. Today, we have set up the restoration fund which we believe will enable families to be reunited; it will enable people to come together with their loved ones. We believe that that is the best way of healing the very deep wounds of the past.

Lord Eden of Winton: My Lords, I strongly support what was said by my noble friend Lord Strathclyde. Can the noble Baroness give any information about whether a review is taking place into why those appalling events have taken so long to come into the full light of day and for pronouncements of this kind to be made? Are there not lessons for us all to learn here about the fact that sometimes early warning signs can be lost, put aside or ignored and sometimes rather irritating observations can also be brushed aside? Should we not be very careful indeed to ensure that if anyone, even a small voice, challenges what is going on in the public domain or in their personal life, officialdom should take heed or should be alert and examine carefully and objectively what is being put to it?

Baroness Royall of Blaisdon: My Lords, there are many lessons to be learnt from this horrendous episode in our history. The noble Lord is right in saying that we must pay heed to all early-warning signals and that they should not be lost or ignored. I do not know whether a review has taken place but I know that we will all learn the lessons that are there to be learnt. In today's world, things are so much more transparent and while, as the noble Lord says, we must pay heed to early-warning signs, it is more difficult than it was in the past to cover things up and brush them under the carpet. I hope that we will take pride in the new transparency, which we all welcome.

Baroness Nicholson of Winterbourne: I welcome the Statement very warmly indeed. Speaking as the treasurer of the All-Party Parliamentary Group on the Trafficking of Women and Children, I thank the noble Baroness for drawing this House's attention to the exhibition in the Upper Waiting Hall and confirm the importance to Members of both Houses of seeing that exhibition. We should recall that at the time the children were sent to Australia, the United Nations Convention on the Rights of the Child did not exist. A simple statement-a 10-point plan-was brought up in 1927 by the League of Nations and repeated in the United Nations but the full United Nations Convention on the Rights of the Child was not begun until 1979, not put in place until 1988, and not implemented until 1993. Therefore, the child's rights were not at the centre, as they are today.
	Given that child migration, or transportation, is now the fastest growing sector of organised crime, and given the horrifying statistics of the thousands of children that are now travelling unaccompanied, unknown, unidentified, and for malign purposes, across the globe, including to and from European Union member states, are the Government prepared to put their hand to the plough today and not just look to the past and apologise for something which was undertaken in a different legislative framework and which, although abhorrent, was acceptable according to norms then? Are they going to work today to stop the trafficking that is going on at present? In central and eastern Europe, particularly on the perimeters of the EU member states, the Government have withdrawn funding from the Foreign Office and not invested in assistance on the ground. The main sources of trafficking now are Transnistria, Ukraine and Moldova. Children are pouring through and I urge the Government to act.

Baroness Royall of Blaisdon: My Lords, the noble Baroness makes some important and valid points about child trafficking today, which is a crime just like the crime of the past that we are apologising for. I assure the noble Baroness that, together with our partners in the European Union, we are doing as much as we can and should be doing. Clearly, the noble Baroness does not agree, but we are doing an awful lot of things. I cannot cite them today at the Dispatch Box but I will certainly write to her to explain what we are doing to try to ensure that this evil practice of child trafficking ceases. I recognise that it is a blot on our consciences and it is a great crime which we must stop.

Lord Elystan-Morgan: My Lords, the noble Baroness has, with commendable caution, stated that she will not be able to give an absolute guarantee that no authority would ever replicate what has happened in this situation. Does she accept that the statutory provisions of the past 20 years for childcare, the making of care orders, and adoption make it virtually impossible for it ever to happen again?

Baroness Royall of Blaisdon: My Lords, I am grateful to the noble Lord for pointing out the important progress that has been made which should ensure that these evil things do not happen again.

Northern Ireland Assembly Members Bill [HL]

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	Amendments

Third Reading

Baroness Royall of Blaisdon: My Lords, the Bill will permit the Northern Ireland Assembly to delegate powers in relation to the setting of salaries and expenses for Members of the Northern Ireland Legislative Assembly. Currently, the Assembly is explicitly prevented from doing so under Section 47(7) of the Northern Ireland Act 1998, which states that the Assembly may not delegate such functions. The Bill therefore removes this restriction, thereby enabling the Northern Ireland Assembly, should it so decide, to confer the functions of setting salaries and allowances for Members of the Assembly on an independent body of its choosing.
	Although this is a short Bill with only three clauses, we have had a thorough and constructive debate throughout all of its stages in this House. At Second Reading in Grand Committee, it became clear that noble Lords wished to use the Bill as a means to address the issue of dual mandates. The Government recognised the strength of feeling on this issue, and on Report I returned to the House with two government amendments. The effect of these amendments was that any MLA who was also a Member of either House of Parliament or Member of the European Parliament would not receive any salary for their position as an MLA. Noble Lords recognised the Government's willingness to seek a compromise on the sensitive issue of dual mandates and agreed to the amendments, for which I am grateful. This means that the Bill before us has the full support of the House. Through effective co-operation, we have shown yet again how the House can work together in order to find common ground.
	Motion
	 Moved by Baroness Royall of Blaisdon
	That the Bill do now pass.

Lord Kilclooney: My Lords, I will be brief. I spoke on this previously. I was uneasy about the restriction on people having dual mandates. I mentioned that there were people in Northern Ireland with triple mandates. The Nobel laureate, Mr John Hume, was an elected Member of the Northern Ireland Assembly, an elected Member of our national Parliament and an elected Member of the European Parliament. We had the same situation with the leader of the DUP, Dr Ian Paisley. I understand the restrictions on them getting three salaries, or three sets of expenses; but it is a dangerous step for Parliament to decide who people can or cannot vote for. We are restricting who can be a candidate in elections. That is a very dangerous train for Parliament to take.
	One further question was brought to my attention in Northern Ireland.

Lord Glentoran: My Lords, the noble Lord, Lord Kilclooney, has got it slightly wrong. The Bill does not stop people being elected: it only ensures that they cannot take three salaries.

Lord Kilclooney: I was coming to my next point, which was brought to my attention in Northern Ireland. Can a Member in Northern Ireland be elected to the Irish Parliament in Dublin, and will this in any way affect his allowances or salaries?

Baroness Royall of Blaisdon: My Lords, first I endorse what the noble Lord, Lord Glentoran, said: all that the Bill does is restrict salaries. If the people of Northern Ireland wish to elect one person to two posts, that is entirely up to them. I am told by my noble friend that this has no bearing on allowances in the Irish Parliament, but I do not think that that answers the noble Lord's question, so I will come back to him in writing. However, I do not know of anyone who serves in two Parliaments in two jurisdictions. I may be wrong about that, but I will come back to the noble Lord in writing. I am floundering here. I think that the best thing for me to do is to come back to him in writing and to put a copy of the letter in the Library.

Lord Alderdice: My Lords, on Second Reading I raised two questions regarding the Speaker of the Northern Ireland Assembly: first, the re-election of the Speaker; and, secondly, the pension arrangements for the Speaker. The Leader of the House responded very constructively and undertook to write to me on those, and I am in a position to reassure the noble Lord, Lord Kilclooney, that when she says that she will write, she does. She responded very constructively to the questions that I raised and I want to acknowledge that.
	The noble Baroness made it clear that in respect of the re-election of the Speaker, the intention of the Northern Ireland Office and Her Majesty's Government was to explore the question with the parties in the Northern Ireland Assembly after the devolution of policing and justice, and that if there was agreement on that, they would bring forward a legislative instrument in your Lordships' House and in the other place. As for the pension arrangements, she rightly pointed out that although it is currently a matter for the Northern Ireland Assembly Commission-and perhaps subsequently for an independent body-the matter had been brought to the attention of the authorities. I want to acknowledge that, too, as it was discussed off the Floor of the House. It is important to record my appreciation, and I think the appreciation of others, that the noble Baroness took this seriously.

Lord Glentoran: My Lords, I thank the noble Baroness and everyone else who has taken part in the very constructive debates we have had over the various Readings. I should also mention Mr Goggins, in another place, with whom I have had a number of conversations in trying to reach agreement on our amendments, despite the fact that he was involved in Hillsborough and other things. As the noble Baroness said, this has been a very good example of what this House can do to get sensible results out of a certain amount of disarray.
	Bill passed and sent to the Commons.

Flood and Water Management Bill

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Second Reading

Moved By Lord Davies of Oldham

Lord Davies of Oldham: The Bill has received thorough scrutiny in the other place. We have listened to both stakeholders and parliamentarians and now have before us an even better Bill than that introduced three months ago. I think that all parties recognise the importance of the provisions. I am looking forward to working with the House in maintaining momentum, ensuring that this vital Bill makes it on to the statute book.
	Noble Lords will be aware that the core of the Bill implements Sir Michael Pitt's recommendations requiring urgent legislation from his review of the devastating floods of 2007. Although climate change projections suggest that severe weather events will occur more frequently in future, we all know that flooding can happen anytime. The recent floods in Cumbria were a stark reminder of that.
	We will have to continue living with the threat of flooding. One in six homes in England and Wales are in flood risk areas, including vast swathes of major cities such as Portsmouth and Hull. We cannot write off these areas. We are an island nation that is becoming ever more crowded, yet we want to see more new homes built, new businesses founded and communities thrive, and rightly so. That is why the Bill is so important. The risk of flooding will not go away, so we must manage it.
	Just as we must help to protect people from the dangers and costs of too much water, we must also protect and manage the supply of water to the consumer. Therefore, where opportunities have presented themselves, we have also included priority water legislation in the Bill. We recognise that there is still much proposed water legislation to bring forward from the draft Bill, and from the recommendations of the recent reviews by Anna Walker and Professor Martin Cave, and we remain committed to bringing forward further legislation at the next opportunity.
	Part 1 of the Bill is about defining roles and responsibilities for all sources of flood risk. The Environment Agency will have a duty to develop a national strategy for flood and coastal erosion risk management in England, and Welsh Ministers will have a similar role in Wales. County and unitary authorities will lead on managing all local sources of flood risk, including surface water flooding, and will ensure that local flood risk management strategies are developed.
	As the House will know only too well, water pays no heed to political boundaries, so the Bill encourages partnership working by introducing a duty to co-operate and by enabling all flood risk management authorities to enter into agreements with each other. This is crucial, as flood risk will only ever be successfully managed if all those involved succeed in working together.
	In conjunction with wider works powers and the adoption of a risk management approach, these national and local strategies will ensure the effective management of flood risk and the delivery of wider objectives. Regional flood defence committees will be replaced by regional flood and coastal committees with a remit that is extended to include coastal erosion. These committees will retain their executive function in determining the use of the local levy and will approve the regional spending programme of the Environment Agency.
	Schedule 1 gives powers to protect assets that perform an important role in protecting communities from flooding or coastal erosion. The schedule provides for compensation where powers of entry are used unreasonably and requires comprehensive appeals mechanisms to be set out in regulations.
	Schedule 2 makes important but detailed changes to existing legislation, including provision for local authority overview and scrutiny committees to hold to account all flood risk and coastal erosion risk management authorities in their area.
	Schedule 3 will help us to manage the risk of surface water flooding by encouraging the use of sustainable drainage systems. New developments and redevelopments will need to have their drainage approved by the county or unitary authority. In addressing a key recommendation of Sir Michael Pitt's review, there will no longer be the automatic right to connect surface water to the sewer system. Having listened to debate in the other place, we have amended the Bill so that we can ensure that applications for the approval of drainage are processed in a specified time, so the planning system is not held up. We have also been speaking to Water UK to clarify how water companies will feed information on sewer capacity into the development process.
	Sustainable drainage systems that drain more than one property will be adopted by the county or unitary authority. We are committed to ensuring that this new burden is funded, and we will publish a clear way forward that takes account of the circumstances faced by both local authorities and developers in time for the implementation of these provisions.
	Reservoir legislation must be brought up to date so that reservoirs are regulated on the basis of the risk that they pose and not on how large they are. This will make communities living near to reservoirs safer. The criteria that will be used to determine what constitutes a high-risk reservoir will be set out in regulations and guidance, on which there will be consultation.
	Part 2 of the Bill contains a variety of provisions, including powers for the Environment Agency, local authorities and internal drainage boards to carry out flood works for nature conservation or cultural heritage. This complements the provision in Part 1 of the Bill that places a duty on flood risk management authorities to contribute to sustainable development objectives in their flood risk work. Similarly, it builds on the risk management approach in Part 1 by amending the Building Act to enable any future regulations requiring flood resistance or resilience to apply to smaller repairs as well as major work.
	Part 2 of the Bill also contains priority measures that would better prepare us for times of water shortage, and protect water supplies to the consumer. We have widened the list of uses of water that water companies can control through hosepipe bans during periods of water shortage, and the UK Government and Welsh Assembly Government can remove uses from the list, as well as add to it. There are also several other measures around the regulation of water companies, including reform of the special administration regime and the introduction of a new regime for the delivery of large, complex or unusual infrastructure projects. Water companies will be able to introduce concessionary schemes for surface water drainage charges. I know this is a provision of particular interest to the Bishops and others, as it will safeguard religious and community groups from unaffordable rises in their water bills-a feature known to the House in the not so distant past.
	We go further in this Bill to address water affordability. The other place seized the chance to enable water companies to bring forward other charging schemes, including social tariffs to help vulnerable groups in society who are struggling to pay their bills. We have also taken action to alleviate the burden of bad debt in the water industry, which increases the bills of normal law-abiding citizens by an average of £12 per year. For household customers, water companies will now have a named person responsible for paying bills, when the occupier of the property is not the owner of the property. This will help lessen leaver debt, which is responsible for about 44 per cent of the bad debt problem. These were priority recommendations from Anna Walker's review of water affordability, and we intend to consult on the best way to implement them, just as we intend to consult on the rest of the review as a whole.
	Part 3 of the Bill contains a power which allows for other consequential amendments to existing legislation to be made. We have included this provision in order to pave the way for unifying floods legislation at the next opportunity. Throughout the course of the Bill, we have strived to work through the concerns of stakeholders and parliamentarians. The Government brought forward several amendments to reflect stakeholder concerns and those of the opposition Benches in the other place. In other cases we have been able to provide assurances off the face of the Bill. Funding is inevitably a key concern. I reiterate that we are fully committed to funding all net new burdens for local authorities that will arise from the Bill. We are establishing a joint implementation review panel with the Local Government Association to keep costs and assumptions under review, and oversee skills and capacity issues to see what more can be done.
	Another significant area of debate has been the continued provision of affordable insurance for those who live in flood risk areas. This is something that both the Government and the insurance industry are committed to maintain, and we continue to work closely with the Association of British Insurers to discuss the future of flood insurance. I know that my colleague in the other place, the honourable Member for Ogmore, has a meeting in place to look further into this issue.
	We have met representatives from the Fire Brigades Union on the subject of a statutory duty for the fire and rescue service, and with the Horticultural Trades Association about the code of practice for temporary hosepipe bans during periods of water shortage. We have also been working with representatives from the farming industry and others with reservoir interests, to assure them that the reservoir provisions will not create onerous burdens, especially for small landowners. I hope that this demonstrates to noble Lords our willingness to work through wider concerns related to the Bill outside of this place. I now look forward to working with noble Lords to scrutinise and deliver this Bill to the statute book.
	I finish by praising those who have piloted the Bill through its stages in the other place, especially the Secretary of State, and the Minister for the Natural and Marine Environment, Huw Irranca-Davies. It has progressed swiftly but steadily to this House, and in a collaborative manner, which I am sure will continue in our deliberations. I commend the Bill to the House.

Lord Taylor of Holbeach: My Lords, I should declare my interests before speaking in this Second Reading debate. I am a landowner, farmer and grower working in a family business in the silt lands of south Lincolnshire. We are members of the National Farmers' Union and the Horticultural Trades Association, which, as the Minister mentioned, have both made submissions on the Bill, raising issues to which I shall refer. I am also vice-president of the Association of Drainage Authorities, a body representing engineers and administrators engaged in flood and water management. My nephew, who is also one of my co-directors, is an elected member of the South Holland Drainage Board, which in turn forms part of a consortium of drainage authorities in eastern England called the Water Management Alliance. We are also, as a family business, members of the Holbeach Marsh Irrigation Co-operative, which plans to manage the water supply to some of the country's most productive agriculture. I am sorry to go into some detail, but these interests are relevant to the Bill and I hope that it is not immodest of me to suggest that they may assist me in contributing to the debates that we may have on it.
	I thank the Minister for introducing the Bill. It is much needed and we support it, as we have indicated many times before, both in this place and in another place. All sides of the House agree on the importance of reducing the risks of flooding and making changes to our national and local response to incidents of flooding when they occur. We have seen terrible images of flood-hit regions in recent years and the pressing need for legislation on how we deal with flooding has become evident.
	I am sure that all noble Lords are mindful of the devastation wrought by floods in Cumbria before Christmas, when we saw images that we would not normally expect to see in Britain. I was in Cumbria recently and was able to see for myself the devastation in Cockermouth and on surrounding farms. I saw the impact on families, their homes, businesses and communities. Months after those floods there are still businesses closed down, shops unoccupied and hundreds of people waiting to return to their homes. I am sure that a number of noble Lords will have seen last Sunday's "Songs of Praise" from Cockermouth, which vividly portrayed both the devastation and the courage of the local people in trying to clear up the aftermath. I also saw the newly completed flood protection scheme in Carlisle, which potentially saved some 600 homes from flooding, along with a significant part of the commercial area of the city. Engineering and planning can indeed reduce flood risks.
	Less than two years ago I was flooded myself-not at home in the Fens but in my holiday house in France, where 20 centimetres of rain in four hours wreaked havoc in my small valley village. I was relatively fortunate, as I was there and could limit the damage, but I directly experienced the overwhelming power of the floodwater as it swept through.
	I am mindful, too, of the floods of summer 2007, which may well have been the biggest peacetime emergency since the war, in which 13 people died and more than £3 billion-worth of damage was caused. If, as many fear, climate change leads to more severe and more frequent flooding, it is essential that we have in place the strategic plans to assist with the prevention, management and aftermath of floods.
	As the Minister explained, the Bill implements recommendations from the review into the 2007 floods by Sir Michael Pitt. We on these Benches supported those recommendations and we are glad that we finally now have the opportunity to consider the proposals in legislation.
	We welcome the provisions that give the Environment Agency strategic oversight and spell out in statute that, in most cases, the lead local flood authority with clear responsibility for flood defence will be a unitary authority or county council. I agree that the Environment Agency has a crucial role to play. It is an organisation with a natural breadth of personnel and expertise, but it must work with local authorities. I know that this area was examined by colleagues in another place and we will, I am sure, return to it in Committee here. Local authorities have two considerable merits: they bring to the table local knowledge and they have democratic accountability. Our localism agenda is not for nothing. The more local communities are involved in preparations for flooding, the better prepared they will be. I do not think that the Minister or any other noble Lord would demur from that view. I have been encouraged by conversations that we have had with the Environment Agency in which it has stressed the important role that it feels local authorities have to play. We will examine in Committee ways of ensuring that the Bill reflects that sensible position. I would welcome a statement from the Minister on how he sees the new regime working so that local concerns are properly heard.
	Given my declaration of interests earlier, noble Lords would expect me to emphasise the key role of internal drainage boards. Where they are responsible, they have been able to engineer out substantial elements of flood risk. They are a unique combination of landowner and local community interests. I hope that we will have the chance in Committee to discuss ways in which their role can be recognised. When flood risk and the consequential plans emerge, they may identify hydraulic catchment areas that can associate with existing nearby boards. Finding ways in which the engineering skills that exist in IDBs can be shared may be an important part of the solution, with flexibility the key. It is worth considering what the situation on the Derwent and the Cocker might have been had an IDB been responsible for flood and water management.
	A good working relationship with the Environment Agency can be hugely important in the effective use of designated main rivers. These rivers may be quite small but they still need proper management if they are to be used as part of a drainage system. They are the Environment Agency's responsibility. It is important that they are maintained as water vectors, as IDBs frequently need them as part of their drainage and flood prevention strategy.
	When undertaking work that would impact on flooding or coastal erosion, the agency has under Clause 38 the responsibility to balance the different benefits of that work, including nature conservation, preservation of cultural heritage or people's enjoyment of the environment, with the potential harmful consequences. In our view, it is not appropriate for an unelected government agency to have the responsibility for balancing these competing interests and we will ask the Government to look again at this proposal in Committee.
	Another area to which we will return is Clause 33 and Schedule 4, on reservoirs, and how best to minimise the costs to individuals-I am grateful for the way in which this matter was introduced by the Minister. I think especially, but not exclusively, of hard-pressed farmers and of the risk assessments that must be carried out on their land. I understand from the Environment Agency that the responsibility of most farmers will end at the point of registration, which is without charge. I hope that the Minister can confirm this. However, if at registration a potential threat to habitation is revealed, extensive costs and procedures could be involved. For example, the Environment Agency estimates that the annual cost of inspecting a reservoir could be as much as £1,000. That is not an inconsiderable sum and we should examine ways to minimise it where possible; indeed, it should be eliminated for those smaller reservoirs that are far from inhabited areas. If what I have been told by the Environment Agency is true, we should make the Bill clear on this matter.
	Elsewhere, in Part 2 of the Bill, we broadly support the provisions on infrastructure that require large projects to be open to competition. That has the potential to help to reduce costs to water customers. We are also pleased to see Clause 43, which deals with the problems of charging for surface water drainage, the "rain tax". This caused much difficulty for community groups such as scouts and guides and for places of worship, which were faced with unacceptably high bills. The oversight of the regulator still needs to be looked at, but overall this is very welcome. My honourable friends in another place, Nick Herbert and Anne McIntosh, deserve to be given credit for the role that they played in pressuring the Government to give companies the discretion that they need to protect these groups and to ensure that new charges are properly monitored by Ofwat. This will make a big difference to many groups that were facing unaffordable charges. I hope that the Minister will confirm this.
	Consumer debt in the water industry is a major problem, which affects poorer families struggling with bills and the major water companies trying to balance their books alike. We cautiously welcome Clause 44, which allows for social tariffs. I say "cautiously" because we will need to be convinced that the clause will achieve what the Government hope it will. I note that the introduction of cross-subsidies goes against the recent efforts by Ofwat to unwind such subsidies. We are concerned that the clause will simply shift the burden of bills from the poor to the slightly less poor. The background work to this measure, carried out by Anna Walker, involved a much larger package of measures and deserves proper consultation and a formal response from the Government. We would prefer that method to the piecemeal one that we have been presented with. I echo calls by my colleagues in another place for a White Paper that could look at all the issues affecting the water industry.
	We will also seek to look at the automatic right to connect new drainage systems to existing sewerage networks. Sewer flooding is not something that I would wish on anyone and we ought to do what we can to reduce its occurrence. Clause 42 and Schedule 3 refer to the standards that ought to be met by new drainage systems if they are to be permitted to connect and we will seek explanations from the Government about how those conditions will be met and what should happen if they are not.
	We welcome the idea of sustainable drainage and believe that developers need to include sustainable urban drainage systems, or SUDS, in their plans at the earliest stages of the process to ensure that these are successfully designed, built and maintained. We are therefore pleased to see that the Bill is taking steps to ensure this. However, we also agree with the EFRA Select Committee report that more work needs to be done to answer some of the issues relating to SUDS, especially with regard to funding and responsibilities.
	Another area that has been brought to our attention in preliminary discussions with stakeholders on the Bill is Clause 36, which deals with temporary bans on water usage. That, of course, has a significant impact on gardens, gardeners and the gardening industry. Drought conditions in summer 2006 led to widespread bans on the use of hosepipes to water gardens and wash private cars, particularly in the south and east of England. These bans were introduced by water companies and applied different restrictions in different areas. The lack of consistency of application resulted in widespread confusion among the gardening public and water companies alike.
	The then Environment Minister in another place, the Minister's honourable friend Phil Woolas, announced the Government's response to that consultation in October 2007. As part of the response, he said that the water industry, in conjunction with stakeholders, should produce a code of practice informing people about the new powers. This code should also explain what the priorities for water use are when water is in short supply and how restrictions would typically be implemented. I am pleased that the Minister mentioned that in his introduction. However, although I welcome the increased certainty achieved by Clause 36, which sets out what sort of water uses may be restricted, could the Minister tell your Lordships' House what has become of that proposed code of practice? It has been a long time coming, if we are ever to see it. The Horticultural Trades Association is, I know, very keen to support such a code. Whatever happens, the use of water by commercial nurseries, particularly those raising container plants, needs to be recognised.
	I have raised a number of issues that we have with this Bill and to which I have indicated we will return in Committee. I hope that we on these Benches will have the opportunity of working with the Government to deal with them and I reiterate the support of these Benches for what is, in the main, a very welcome Bill.

Lord Greaves: My Lords, I declare what is, I think, my only interest in this; I am an elected member of Pendle Borough Council. I, too, thank the Minister for his presentation and for going through the contents of the Bill so succinctly. On behalf of the Liberal Democrats, I, too, give a broad and almost enthusiastic welcome to this Bill, which, as the Minister will know, is pretty good going for me.
	This is a good Bill; it has had a great deal of scrutiny and been long in the gestation. It really has its origins in the Pitt review after the dreadful floods in 2007, and since then it has been made more topical by the more recent floods in Cumbria. It has had a thorough going-over by the EFRA Committee in the House of Commons, which produced some sensible suggestions, some of which were taken up by the Government. There has also been useful work in the Commons itself, as the Bill has gone through that House, so it seems to me that what we have here is of higher quality than some of the Bills that are occasionally sent to us in this House. Having said that, I do not believe that it does not require-and would not benefit from-further discussion and scrutiny on many of the things that the noble Lord, Lord Taylor of Holbeach, mentioned and on some issues which we would like to raise.
	In particular, I congratulate the Government on Clause 44, which covers social tariffs. They worked closely with my honourable friend Martin Horwood in the House of Commons. The noble Lord, Lord Taylor, said that he would now cautiously support that; I am informed that his party did not quite do that in the House of Commons when Martin Horwood first raised the matter. I very much welcome the cautious movement that the noble Lord, Lord Taylor, has made on behalf of the Conservatives. That is a step forward, but if more comprehensive reform is required in future, perhaps some of the provisions that were dropped from this Bill because of the shortage of time in this Session would make that further water legislation more comprehensive. As it stands, however, I very much welcome that clause.
	There are still some issues to be bottomed. The problem is that we are faced with an impossible timetable, because we all know that the law of the land means that this Parliament has not got much longer to go. There is a lot of press talk about when the general election will be; we all know that, in effect, it has to be by 6 May at the latest. That is in a practical and almost a legal sense, so we are faced with the difficulty that it will be impossible for the Bill to go through this House on the normal sort of timetable. We may therefore have to find some alternative means of discussing the matter with the Minister and his colleagues to see whether there are issues which, at the very least, require further clarification and understanding.
	It is our view that, at an absolute minimum, the Bill will require two days in Committee. It ought to have more than that and almost certainly would have three or four days in normal circumstances. If it does not get an absolute minimum of two days in Committee, this House will not be doing the job that it ought to do in scrutinising this legislation, not just in detail but on some of the major strategic issues that exist. The Minister probably cannot give us that commitment today, but I place on record that that is what we think. The Minister has some slight influence in this matter so I hope he will use it. If it comes to the process which is colloquially known as the wash-up-or the washing up, as I call it-we will not obstruct the Bill because we want it passed. However, we hope that will not lead the Government to think that it will get general approval and therefore does not need further scrutiny.
	I turn to some of the issues which will benefit from further scrutiny. My noble friend Lord Addington will talk about the concessions for community groups, such as the Scouts and others, under Clause 43, so I will not touch on that further. It probably requires more discussion to get an assurance that these concessions will take place. As the Bill stands, they are voluntary on the part of the water companies. My noble friend Lord Redesdale will talk about an aspect which is absent from the Bill-the role of Ofwat in several important areas.
	Some of the issues that should be further discussed include a whole series relating to the relationships between the many bodies involved in flood risk management and dealing with floods when they occur. There is the relationship between the Environment Agency and the lead local authorities, for example in the preparation of local flood risk management strategies. These are vital issues because there are many organisations involved. The key to this legislation working will be whether these organisations have adequate, effective working arrangements. This requires further discussion. How do the regional flood and coastal committees fit in relation to the Environment Agency and local authorities? In two-tier areas, what is the relationship between counties and districts? The Government have made some useful improvements to the Bill on this matter since the draft stage and there is the basis in the Bill for a sensible working arrangement. However, it is not exactly clear at the moment how that will work. If left to themselves, some organisations will have excellent relationships and there will be others where it does not work quite as well.
	The role of districts and the designation of assets, or features as they are called in Schedule 1, seems to require further teasing out. The contribution to sustainable development is something on which we may want to have further discussions. "Sustainable development" is the great buzz phrase which always appears in legislation. We always try to get the Government to tell us what it means and they always run away and say they cannot put in legislation what it means. However, we all know what it means and all have a slightly different angle on it. In this legislation, however, the Government promise guidance. They will send guidance to local authorities on what is meant by "sustainable development", at least in relation to flood and water management. We will all look for this guidance with great interest. This may be the first time that the Government have had to define what they mean by "sustainable development". We will see.
	A further question is that of the relationship between planning applications and the applications for approval of SUDS-an interesting acronym to use with flooding. This again is particularly difficult in a two-tier system where the planning authority is the district and the SUDS authority is the county. There is a real risk that this will cause serious delays and complexities in planning applications unless it is got right. The Local Government Association believes that the planning authority should be responsible for approving SUDS, not the lead flood authority. We will want to discuss these matters further.
	On the designation of features-flooding assets-there are concerns among owners of such assets, ranging from farmers to Network Rail. These matters also deserve further discussion, if only to allow the Government to make it absolutely clear on the record how they think the system will work.
	There is the question of enforcing SUDS and who will be responsible for enforcement. Again I am talking of two-tier areas-the sort I know best-where the county will perhaps be responsible for enforcement although an enforcement system is already being run by the district planning authorities. They will be enforcing planning misdemeanours. If we are not careful there will be two sets of enforcement staff turning up on successive days. Will they work together? That also needs sorting out.
	Then there is the relationship between all these public bodies and the water companies, which is a vital component in the jigsaw. There is the issue of reservoirs, raised by the noble Lord, Lord Taylor. I have been trying to get my mind around what 10,000 cubic metres might look like. It has been suggested to me that it represents one-and-a-half times the size of the Royal Gallery if it were to be filled up to the portrait of William IV. Noble Lords can have a look. I am afraid that William and Mary would be well sunk, along with Alfred the Great and many other dignitaries from the past. I am not quite sure, but it might also represent twice the size of this Chamber. So we are talking about a large body of water, and if the calculations put to me are correct, we have an idea of the size of the bodies of water that we are talking about.
	The LGA, quite rightly, has raised the question of local authority funding, as it always does regarding new legislation. This needs to be absolutely clear, particularly in the present financial climate and what is likely to be the financial climate for local authorities in the next two or three years. If local authorities have substantial new tasks they need adequate funds to carry them out. It is absolutely right that local authorities are in charge of the system at local level, within the overall national system run by the Environment Agency. That seems to be the right way to do it; it came out of the Pitt review and the Government have got it right. The funding has to be right also. Of course no one can guarantee future funding, especially in the present climate, but we ought at least to have a clear idea of what the funding requirements will be and whether they are likely to be met.
	The noble Lord, Lord Taylor, mentioned temporary hosepipe bans. This issue has been raised particularly by horticultural interests. The Bill does not necessarily need to be changed, but we need a clear on-the-record statement by the Government of how the issue will work. Perhaps we may find ways of obtaining that, even within our short timetable.
	We have to find ways of discussing these matters as concisely, but as effectively, as we can. If, because of the timetable, it is impossible to effect any changes to the Bill, which is a possibility, we need a clear statement on the record. That is the task before us in the next three or four weeks before we are all sent home to go on holiday while people from the House of Commons do other things.

Lord Cameron of Dillington: My Lords, I declare an interest as a farmer and landowner and a member of the CLA and NFU. These are quite modest interests compared with those of the noble Lord, Lord Taylor, but we on these Benches try our best.
	The Bill is relatively uncontroversial and is much needed to create certainty in an area in which the problems can get only worse in the decades to come. Furthermore, I believe that the Bill has greatly improved since its first appearance and my remaining concerns are relatively minor.
	My biggest concern all along has been that we might inadvertently lose our very valuable heritage of managing our water on a catchment by catchment basis. As has been said on numerous occasions, water flow does not organise itself to follow our political administrative boundaries, although as it happens in my county of Somerset, our historic boundaries are based on catchments, and with the exception of one or two minor tributaries, all our rivers rise in Somerset and fall to the sea within our county boundary. But we are an exceptional county in a variety of different ways.
	On the other hand, most local authorities either receive water from their neighbours or pass it on to others-or sometimes both. In other words, they are part of a greater whole known as a catchment. There was a time when I went to two or three water conferences on the continent, largely to do with the absurd nitrate directive, which I shall not go into here. But the point that was again and again rammed home to me was how lucky we were to have our water industry and flood protection administration on a whole catchment basis. Those involved in water issues on the continent were extremely jealous of what we had here. They, of course, could not achieve that. Some of their rivers crossed boundaries not only of local administrations but of countries, some of which were not always on good terms with each other and might not even speak the same language. Downstream administrations have to work harder on their diplomacy to ensure that the upstream policies on abstraction, discharge and flood protection do not inconvenience them.
	My starting point in considering the Bill was that catchment based water management is a pearl that we must never surrender. I believe that the Bill is a very good attempt to compromise between that priority and the desire to have local democratic accountability whereby the buck stops with somebody or some organisation that can be voted out of office when they let down their constituents. The Bill recognises that there are a host of activities largely controlled by local authorities, such as planning and highways, that impact on water management. The Bill rightly arranges for the reskilling of local authorities-I shall leave the proposed financial arrangements for others to discuss-so that they can devise and implement their local flood risk management strategies in line with the national strategy devised by the Environment Agency. Various clauses in the Bill encourage local authorities to co-operate with one another under the guidance of the Environment Agency, but while co-operation is encouraged I am concerned that there seem to be few powers for the Environment Agency to drive catchment co-operation. I am not certain whether the EA even has the power to mediate between an upstream and a downstream local authority. Above all, it is not clear that the EA has the power to ensure that the river catchment system actually works and that the series of flood-risk management plans in a large catchment will work together. I believe that the Environment Agency should have some overarching power in that respect.
	Maybe the co-ordination of the river catchment is the responsibility of the new regional flood and coastal committees. After all, if the current arrangements apply, they should have a majority of local authority members which could ensure better co-operation. But will they still? Clause 24 is remarkably unclear about membership. The Minister in the other place indicated that guidance on this issue would be forthcoming in due course-I think autumn was mentioned-but at any rate, under a new Parliament and when we have all taken our eye off the ball. Furthermore, these regional flood and coastal committees could be organised on a catchment basis, which would help, but again there is doubt on this issue. Reading between the lines of the Minister's reply in the Commons, we are unlikely to know how they will be organised territorially until guidelines emerge-maybe in the autumn again, I cannot remember. In any case, he made it clear that catchments are only one of many criteria to be considered. That again gives me mild cause for concern.
	Sticking to my theme, the art of flood management on a catchment basis is all about flood prevention rather than flood defence. By that I mean that you do not want large concrete defensive walls and pipes in the upper reaches of a river, which prevent the flood water covering your land and the streets in your town, but which thus channel the water quickly downstream and out of your administrative area where it becomes someone else's problem. Instead, you need voluntary contracts with upstream land managers to hold the water back and reduce the speed of flow and run-off so the whole catchment benefits from your action. There are various loose references in the Bill to these so-called softer defence mechanisms and phrases such as "maintaining or restoring natural processes", and how authorities,
	"must aim to make a contribution towards the achievement of sustainable development".
	There is also Schedule 3 on SUDS-though this is not quite the same thing, and in any case leaves some unanswered questions.
	It may be that the explicit references to soft flood defence systems I seek are not suitable for inclusion in the Bill. If this is the case, I hope that any guidance on the matter will, first, come out before the autumn-which seems to be the aspirational timescale for most of the guidance needed to make this Bill work-and secondly, that such guidance will spell out how to achieve the sort of soft flood defence systems I seek. I say this because I am well aware that there is still an overwhelming tendency among drainage engineers to fall back on their training and experience which makes them favour a hard flood defence route, based on a risk analysis system they can understand, rather than taking a more imaginative and preventive holistic approach.
	I have a couple of other points. In the discussions in the other place about Schedule 1 and the designation of features, I am glad to say it became clear that the appeals system was going to include the right to appeal not only against the designation and its terms, but also against any refusal of consent to alter or remove, et cetera. As far as I can gather, guidelines will also emerge on this matter in due course-no doubt in the autumn. However, I am slightly concerned that the only criteria that seems likely to be considered is whether the feature,
	"would affect a flood risk".
	Can we please have a duty to assess the actual risk involved, so that a small risk-for example, if the feature is only relevant in a one-in-10,000-year flood-does not automatically outweigh any economic, social or environmental gain to be achieved by the alteration? All too often, experts deciding on these issues believe that their area of expertise is paramount, and they tend to get things out of perspective. For instance, if you try to get planning permission which would create 100 new jobs but disturb a badger, you will come up against a brick wall: for the person granting the licence, the badgers reign supreme and that is the end of it. I hope in this case that considerations other than those purely of flood risk can be taken into account.
	Finally, I gather that we have been promised a regulatory impact review of the reservoir safety clauses to take place 12 months after the legislation has been in place. This is a good idea, because although the Environment Agency says that managers of low-risk reservoirs will not incur any extra costs, it is important that those farms and golf courses which practise sustainable water management should not have to suffer extra costs because of the new rules.
	All in all, my concerns about this Bill are negligible, and I feel sure that a few probing amendments answered by the Minister will probably be sufficient to alleviate them.

The Lord Bishop of Exeter: My Lords, I add to the apparent broad unanimity of all Benches in warmly welcoming this Bill and recognising its vital importance. However, from the perspective of community groups, churches and charities, a number of potential concerns remain; perhaps unsurprisingly, they focus on Clause 43.
	Most of your Lordships will be aware of the background to this, so I will try to be brief. Under Ofwat's preferred charging scheme, the utility companies began to introduce site-based charging for surface water drainage for all customers. Churches, scout groups, village halls and the like had not paid rates on their buildings, and therefore had been exempt from the old system of water rates. Under the new system, they were presented with bills for surface water drainage for the first time. A number of concerns have arisen from this, which we have been pressing, and they are threefold.
	It was not the principle of the payment that was the problem but the scale of the new charges and the wide variation in charging schemes between the utility companies implementing the new system. For example, St Cuthbert's, Seascale, in the diocese of Carlisle, was facing an annual increase of 591 per cent over three years: from £34.14 in 2008 to £205 in 2009, £364 in 2010 and £543 in 2011. Secondly, the situation was made worse by the fact that, although permeable ground, such as lawns, does not count for the purpose of the charge, some of the utility companies implementing the new system often did so simply on the basis of the site boundaries on the Ordnance Survey map, leaving it to the unfortunate customer to commission and pay for an independent site survey in order to prove which parts of the site were permeable and which parts drained into the sewer. Finally, when one utility company, Severn Trent, decided to continue treating places of worship as it had done in the past, it was told by Ofwat that the new charging regime did not allow it to do so.
	Community groups have pressed Ministers hard on this and the issues raised here, and I am very grateful for Clause 43, which is the result. It is an acceptance by government that community groups should not be treated on the same basis as commercial customers. Most churches and charitable groups warmly welcome this change of heart on the part of government. I acknowledge how hard they have worked to give us Clause 43, which, together with the very helpful draft guidance published by Defra, appears to go a long way to meeting our concerns.
	However, there is one other major point which we think requires further clarification. Subsection (1) says:
	"An undertaker's charges scheme under section 143 of the Water Industry Act 1991 may"-
	I repeat: may-
	"include provision designed to reduce charges to community groups in respect of surface water drainage from their property".
	So, as drafted, the subsection is permissive rather than mandatory. Our understanding is that this is because, first, not all utility companies have yet introduced surface-water drainage charging; secondly, not all of them intend to do so, although we are not quite sure how this squares with Ofwat's preferred policy on charging; and, thirdly, if the terms of the clause were mandatory, utilities that had no intention of introducing surface-water drainage charging systems would be obliged to do so willy-nilly. Therefore, there are some points for further clarification here.
	In addition, there are two minor points that we think also need clarification. First, paragraph 3.1 of the draft guidance that was made available to the Public Bill Committee in another place states:
	"The Government is clear that it does not want to see community groups facing unaffordable increases in their water bills as a result of site area charging for surface water drainage. We expect undertakers to ensure that this is the case and Ofwat will ensure that undertakers have had regard to this guidance in its approval of individual charge schemes".
	Unfortunately, however, the draft guidance does not provide a definition of what is a "fair and affordable" charge for community groups. Ofwat is charged with overseeing the concessionary schemes and making sure that water companies have regard to the guidance, but at the moment Ofwat is expected to guess at what is fair and affordable. I think that a little more work is needed in this area.
	Secondly, the draft guidance talks about "places of public religious worship". Does that include church halls as well as churches themselves? Alternatively, are church halls included in the category of village and community halls, community centres and similar buildings owned or leased by community associations? Do the Government expect a differentiated approach to the various categories that might be adduced here? At some point during the passage of the Bill, clarification on both those points would be welcome.
	In conclusion, I am looking for an assurance from the Minister as to whether our reading of Clause 43 and the word "may" is correct. If it is, we would like a further firm assurance that, in spite of the wording of the clause, all utility companies that have introduced surface-water drainage charging or which intend to do so will be obliged to make provision to reduce those charges for community groups, which is what the draft guidance seems to imply, and to levy what will be a fair and affordable charge in reality, not merely in some theoretical sense yet to be determined. I fully expect that the Minister will be able to give such assurances but, in their absence, we will no doubt wish to come back to this matter in Committee.

Lord Smith of Finsbury: My Lords, I declare an interest as chairman of the Environment Agency. In that capacity, I saw at first hand the devastating impact of the floods that hit Cumbria last November, when, as noble Lords will recall, the highest concentration of rain falling in a 24-hour period ever recorded in one location in England hit the Cumbrian fells. During that incident 1,800 properties were flooded, 200 homes were evacuated in Cockermouth alone, six bridges were washed away and water in some people's homes was up to 8 feet deep.
	This was a very real reminder to us all of the huge impact that flooding can and does have. It can devastate people's lives and homes not just during the event itself but, as the noble Lord, Lord Taylor, reminded us, for many months and even in some cases years subsequently. It was also a signal that, with the onset of climate change, it is very likely that we are going to face even more severe flooding over the coming years than we have done in the past. We are likely to see more extreme and erratic weather patterns, more concentrated downpours-with the impact that that is likely to have on surface water as well as on rivers and coasts-and the perversity of more droughts during summer months and more floods during other times of the year.
	This Bill is therefore a welcome step in raising our game as a nation to address these challenges. However, it is a welcome first step, because it must not be seen as the end of the story. There will be much more to do even after this Bill is safely on the statute book. The most important and central thing that the Bill does is to clarify the roles, responsibilities, duties and powers of all the various parties for the management of flood risk. It applies to us in the Environment Agency especially, to local authorities, to internal drainage boards and to the new RFCCs. However, it is especially important in relation to surface water flooding, where, up to now, as Sir Michael Pitt graphically identified in his valuable report, there has been real confusion about who is responsible for doing what. The Bill spells out exactly who is responsible for doing what. It places a duty on all of us to work very closely together in order to make sure both that we prevent flooding in the first place and that we respond to it well if and when it does occur.
	Once the Bill has identified the responsibilities, it will be up to us to take the action: to map, to identify, to set priorities, to start to improve the drainage networks and-I add this for the benefit of the Minister and his Treasury colleagues-to secure the funding that will be necessary in order to do the work. I cannot emphasise too strongly how important the central feature of clarification of responsibility is in this Bill. If the Bill ends up in wash-up at Prorogation, I very much hope that at least that central feature will emerge intact at the end of the day.
	I wish to make three other points. First, the Environment Agency recognises absolutely the need for us to consult with, to work with and to co-operate with local communities and stakeholders in everything that we do on flood and coastal risk management. A central theme that I have put in place since I became chairman of the Environment Agency is the need to do everything that we possibly can to work with the stakeholders involved in any local community, which especially means the local authorities in relation to the management of flood risk. That is the most important theme that I have put in place. We have to ensure that there is full consultation and engagement with landowners, occupiers, communities and local authorities. As the noble Lord, Lord Taylor, identified, that will be especially important in relation to the powers of the Bill in Clauses 38 and 39.
	Secondly, the reduction in the qualifying capacity of reservoirs for designation is a matter of some concern, especially to landowners and farmers who have to store water. Increasingly, there will be a need to store water in winter months for use during the summer. Of course, that is coupled with a move towards a risk-based approach to regulation and inspection that looks specifically at the safety of reservoirs and the communities that might be affected if something happens to a reservoir. The Institution of Civil Engineers has said, rather helpfully, that it supports the 10,000 cubic metre threshold for registration. It has said that that volume is the minimum that should be adopted for the proposed measures and it is believed to be the volume proposed by the experts in the reservoir safety industry, based on a sound assessment of the risks of the impact of the volumes of water should a breach take place. We have to ensure that that is all about safety and not about regulation for the sake of regulation. We need a proper risk-based approach, so that we lighten the burden of regulation wherever there is no question of the safety of a reservoir at the same time as we bring down the threshold of capacity for registration.
	Thirdly, I very much welcome the proposals in the Bill for sustainable drainage systems. The days of developers blithely assuming that they could link a new development into an already overloaded drainage system without any adverse consequences will, happily, be over. We have to ensure that, as we seek to have much needed new development in our country, we think about the impact on drainage and sewerage systems at the same time.
	I warmly welcome the Bill. We cannot stop the rain falling and, with increasing occasional intensity, I suspect that things will become even more difficult. We cannot stop floods happening but we can try to prevent, as best we can, the potentially damaging consequences to life and property that may arise. We can do our very best to combat all types of flooding, from whatever sources and causes it may arise. The Bill is a very useful step towards doing just that.

The Earl of Selborne: My Lords, the Pitt review did a good job. It pointed out the overarching requirement for the clear and appropriate allocation of roles and responsibilities for the management of the different sources of flood risk. As the noble Lord, Lord Smith, has just said, the clarification of responsibilities is a key requirement. This Bill sets out how this allocation of roles and responsibilities is to be determined, which is clearly to be welcomed. It is a great privilege to follow the noble Lord, Lord Smith, who is chairman of the Environment Agency, and to recognise the key role that the Environment Agency is called on to play as the delivery body for the strategic overview for England and Wales. It is perfectly appropriate that that role should lie with the Environment Agency and that the responsibilities for risk management should be shared with a number of other organisations-local authorities, whether unitary or district council, internal drainage authorities, water companies, highway authorities, consultative committees and the like. This Bill clearly helps to determine just how these responsibilities are allocated.
	Sir Michael Pitt was asking for an integrated approach to flood risk management, which is what the Bill sets out to achieve. However, there is a slight problem in that the legislation is not integrated. The Minister has recognised that this Bill is only part of the draft Bill that was being looked at earlier in the year. We understand why that is. Time would not allow a fuller look at the other parts of the legislation, which an incoming Administration will have to deal with. Others have pointed out that this is just an instalment, but it is an important part.
	Another even more perplexing bit of legislation, which we dealt with in a rather cursory way in December through a statutory instrument, implemented the EU flood risk regulations. My noble friend Lord Taylor had a debate on this last month. Again, the timing was forced on the Government simply because a bit of well intentioned legislation coming out of Europe to ensure that flooding across the borders of member states could be dealt with in a coherent way had to be implemented into national legislation by December 2009. As so often happens with any Government, two years passed rather faster than expected and the statutory instrument was enacted just a month before this Bill came into this House. That was a great wasted opportunity. No sensible negotiation was able to take place with the Commission to point out that in England and Wales you cannot possibly have cross-border flooding so it is not really an issue for the EU to worry about. We could have said, "Give us a little bit more time and let us take advantage of the opportunity of discussing this Bill to ensure that the measures that the statutory instrument requires on flood risk regulation are appropriately enacted". I know that the Government had originally intended that this Bill would take into account the EU flood risk directive, but the transposition is already happening and you cannot enact that directive in practice without some of the measures in this Bill. Therefore, the legislation is not integrated, although we understand why we have the cart before the horse.
	Clause 3, headed "Risk management", has in subsection (3) a helpful list of examples of things that might be done to manage flood or coastal erosion risk. There are 10 measures listed, including maintaining and restoring natural processes and carrying out work in respect of a river or other watercourse. The ninth measure, which I would like to dwell on a bit and which the noble Lord, Lord Smith referred to in passing, is,
	"preparing, gathering and disseminating maps, plans, surveys and other information".
	This is absolutely central to assessing flood risk. I would like a requirement in the Bill for the Environment Agency to prepare water catchment maps, showing where risks have been identified, who is the manager of each river, highway, bridge, area of land, reservoir or whatever impacts on the risk, and who is responsible for managing the risk. This should all be put in a spatial form. It would feed helpfully into the water framework directive because, when that is implemented, we will require that scale of mapping.
	In practice, the Environment Agency would require the input of the other risk management authorities to draw up these maps. Highway authorities would have to play a large part, as would the other authorities responsible for bridges and roads and a number of other organisations. This geographical data would have to be kept rigorously up to date as development and changes of other kinds take place. Inevitably, the data would be generated by Great Britain's national mapping agency, the Ordnance Survey.
	I am concerned about whether we will be able to continue to rely on the Ordnance Survey to keep its mapping service up to date. A proposal from the Department of Communities and Local Government is currently out for consultation. It would make data from Ordnance Survey freely available. That is highly commendable: there are all sorts of reasons why society would benefit from having the information more widely accessible. I am sure that there will be enormous benefits. However, if you tell the Ordnance Survey that it will have to give up selling or licensing its data or products, and if it is still required-as it certainly will be, not just because of this Bill but for many other reasons-to keep its maps and spatial information up to date, there must be an alternative income stream.
	It will not get any cheaper to do these surveys and, although the consultation has not been completed-it is due for completion on 19 March-I am alarmed to read that implementation is expected in April. That does not leave much time to consider the far-reaching implications of taking out one of the main funding streams from the Ordnance Survey and requiring it to put in a new business plan. It is not clear what role the Government will play in helping to make good the missing income stream. We need an assurance from the Minister that whatever happens-and I hasten to say that I do not dissent from the idea of Ordnance Survey data being more freely available-if we are going to keep a national mapping agency, which clearly we need, the income stream will be replaced if the proposal goes through.
	I will say a word about sustainable urban drainage systems, which have been widely welcomed by other speakers. I had the privilege of chairing a House of Lords Science and Technology Committee inquiry on UK water management some three or four years ago. We were greatly impressed by SUDS schemes elsewhere-mainly overseas. As always, the issue is who will maintain them. We need further thought on this issue. What we have is clearly a great improvement, but, as the noble Lord, Lord Greaves, suggested, we have not bottomed out the funding responsibilities that will stretch for decades ahead. We must make sure of the commitment from the relevant authorities.
	Sustainable drainage systems have an enormous contribution to make, but when the guidance that the Government promise on what is meant by sustainable development comes to address sustainable drainage, it must be made clear that sustainable drainage does not mean connecting SUDS to a foul sewer. By definition, that is not sustainable. As the noble Lord, Lord Taylor, reminded us, if you have sewage backing up and coming into your house, you will never forget it. I hope that the guidance will be specific on that issue.

Lord Addington: My Lords, I find myself in the pleasant position of being able to agree with a great deal of what the right reverend Prelate the Bishop of Exeter said and shall address roughly the same area. I got involved in this because a couple of years ago people started receiving bills for services that had not been included before. Special groups were finding out that they might have to put a huge proportion of their income into paying new bills. The groups that were affected were those that the Government publicly backed and said were good things. The amateur sports clubs were key deliverers of some important government policies. I felt it was potentially particularly unfair-I realise this is the law of unintended consequences-that amateur sports clubs, designed to deliver much of the huge increase in mass participation that is to be built around the Olympic legacy, suddenly found themselves with much bigger charges for a public utility. I feel the Minister is more sensitive and friendly to this argument than many in this House. Something went wrong, and I welcome the fact that people have listened and put something in place to change it. It is a good step forward.
	I looked through some of the briefing that came my way. It was a revelation to all of us who have been in Parliament for a period of time to see just how efficient the Scouts were at gathering together the lobby behind them. The phrase "Beware those wearing woggles" must have been heard in Whitehall, because they really knew how to bring the troops together.
	This new step forward did not take into account what was going on. It affected people in ways that were not intended and did not have the smack of joined-up government-which must be striven for, but will never be achieved-in which certain aspects of government are brought together.
	Clause 43 is a welcome remedial step. However, the groups involved have clarification points that will have to be met in the discussion on the Bill. One that seems to be referred to again and again is the definition of "fair and affordable". The draft guidance gives hints about other things, but when will we find out what is "fair and affordable"? We also have the old may/shall chestnut. I do not know how many hours Members of this House have given to discussing the merits of may/shall. I shudder to think how much of my life has been spent on it, but we think that groups that are new to this field need a good answer because we are not talking to ourselves, but to those outside. Can we make sure of what is going on here?
	Another question that occurs again and again is: if there is a disagreement between a water company and Ofwat or Ofwat and a user about what is fair and affordable, how will that decision be reviewed? It has been pointed out to me in briefing that Clause 44-another very welcome clause-seems to have more teeth. Could we not try to get the more solid foundation of Clause 44 reflected in Clause 43?
	I shall not say much more, other than that Clause 43 is a welcome and honest attempt to deal with an unseen problem. I hope that the Government will give us an undertaking that they will make sure that Clause 43 is as understandable and easy to use as possible because this is a new area affecting administrators and those who run community groups. They do it for free and probably do not like filling in forms. They are probably involved in these groups to do other things. This is particularly true of sports clubs. People are there because they want to be a coach or to help their children get involved. They are not there to wade through legislation. Can the Government give us a firm undertaking that they will make sure that the legislation is as easy to understand as possible? If they do not, even with the best will in the world, they will still cause damage through fear and lack of understanding.

Baroness Fookes: My Lords, I have a particular bête noir with legislation; it is almost impossible to find one subject that is covered by one Act of Parliament. Five Acts of Parliament already deal with water and another three overlap with it. The Bill is no different, but I was pleased and surprised to find Clause 47 on the pre-consolidation amendments, which give Ministers the power to consolidate as far as possible prior to a major consolidation that is usually undertaken by the Select Committee that considers consolidation Bills-a body on which I serve but that meets all too rarely. I therefore particularly appreciate this enlightened clause, and I congratulate the Government on it.
	The main thrust of the Bill is on flooding, but I want to raise an issue that is not as grand as other matters that colleagues have raised. In cities and towns, covering gardens with hard materials so that cars can stand on them is causing far more surface water to run off. In times of heavy rain, this can be very difficult indeed. The Royal Horticultural Society, of which I am a long-standing member, was particularly concerned about this two years ago, and it has made all sorts of imaginative suggestions for the design of small front gardens so that they can take the necessary car off the road and still have softer materials, such as very low plantings that can go underneath a car when it moves in and out of a garage.
	I hope that the Government will be prepared to look at this more seriously. I believe that permeable materials have to be installed in new builds, but that this is not the case for thousands upon thousands of houses and gardens. Although this seems like a small matter, given the magnitude of the number of houses involved it could give a real boost both to the look of the gardens and to the problem of surface water.
	Another issue is drought. I confess that it takes a real effort of will and imagination to think about drought after a winter of precipitation of excessive snow, excessive rain, or both, but I vividly recall the summer and autumn of 2006, to which my noble friend Lord Taylor of Holbeach has already referred. I garden in east Sussex and was acutely affected by a hosepipe ban that appeared to go for ever. I even discovered that the ban was in place in January when I would not have believed that possible. There are real concerns about total hosepipe bans that are imposed at will by water companies and organisations, particularly as different water companies have different ways of looking at the situation, to the utter confusion of consumers. They were extremely bad about getting in touch with consumers during that period. I saw precious plants wilting while I tried to obey the law.
	There is a real need for a good, improved code of practice. My noble friend referred to a draft code that seems to have disappeared from view. I am not sure that the Horticultural Trades Association will mind about that because it had considerable concerns about its shortcomings, but it certainly wants a really good code, and I hope that the Minister will give us some helpful information tonight about the possibility of a code that really works.
	It is essential, first, that the water companies have some clear arrangement whereby they do not simply impose a hosepipe ban but have some gradual implementation, depending on the severity of the drought. For example, it would be perfectly possible to say that we could water only every other day or first thing in the morning or last thing or night-which good gardeners would agree is better anyway-or that we should water vegetables and plants but not grass. After all, you can expend a great deal of water on grass, and it may look pretty awful if you do not water it, but it usually recovers, in my experience. I see no reason in a water shortage to put water on grass when it might be very reasonable to have water to put on ornamental plants and vegetables. Since 2006, there has been a great increase in interest in allotments and growing vegetables in gardens, which I should have thought the Government would wish to encourage. As it was, in 2006, the horticultural trade suffered greatly because of all the confusion and people therefore stopped buying. In the south-east, it was reckoned that no less than £12 million of sales were lost, as well as jobs where they could not afford to keep people. We do not want to see a repetition of that, and I am sure that a good consultative arrangement would be in order and very much welcomed.
	I hope for something clear and proportionate to the situation, which gradually increases the restrictions depending on the need. People would appreciate that and be far more likely to co-operate. Years ago, one of my friends had a son in the police force in Devon and Cornwall in a period of drought, during which there was an absolute hosepipe ban. One night at about midnight, he was patrolling and thought that there were burglars afoot, when it was actually a householder furtively watering his precious plants under cover of darkness. We could do without that, but if we are to get the co-operation of gardeners and consumers, we need to be far more realistic and sensible in how we deal with this. That would be my contribution. I hope that, despite the shortness of time in which to develop this Bill, that matter at least will receive urgent consideration.

Lord Giddens: My Lords, this debate is happening against the background of a failure to reach agreement on climate change negotiations in Copenhagen and a co-ordinated response around the world from climate change sceptics attacking climate change science. I have looked at the details of this for the past three or four weeks, and my conclusion would be that this has made no impact. It has no consequence for the bulk of the science, which is robust and extremely well founded. It means that we are on track for an increase of at least, on average, 2 degrees centigrade, and possibly much more in the next 20 to 30 years. That will bring more extreme weather patterns of all types. That is part of the background of the Bill.
	The sceptics tend to say that we exaggerate the risks of climate change, but on the other side of mainstream science there are some scientists who say that we radically underestimate those risks, and that they are much greater and more proximate than the mainstream scientific community says they are. Noble Lords who want to be truly frightened should read James Lovelock's most recent book, The Vanishing Face of Gaia: A Final Warning, which says that much more extreme climate change is already stacked up into the system, so the kinds of floods that we have been seeing will be more extreme than orthodox scientific opinion thinks.
	The Government have put in place an impressive array of innovations over the past few years to try to combat climate change, of which the Bill is a part. I add to what other noble Lords have said in paying tribute to the Environment Agency, to the noble Lords and Baronesses who have led the agency and to the impressive work it has done since it was set up. Against the backdrop of the likelihood of more extreme weather, it is clear that we have to be proactive and long-term in our thinking. It is not enough to wait until such weather comes along before we try to build the resilience to deal with it. This, I take it, is the background to the Bill.
	However, the origins of the Bill do not lie in that approach; as has been said, they lie in the floods of 2007, the shock that those produced and the subsequent report written by Sir Michael Pitt. Those floods teetered on the edge of a larger catastrophe. If they had spread a little further, whole areas would have lost electricity in addition to the other woes they suffered. Obviously we cannot say of any single weather event that it is the result of climate change, but it is almost certain that we are in for more extreme weather, in an accumulative way, over the next several decades than we have ever experienced before. The Thames barrier was closed four times in the 1980s; it was closed 75 times in the last decade. The Environment Agency, quite rightly, has the Thames Estuary 2100 consultation going on at the moment.
	There was an excellent discussion of the Bill at its Second Reading in another place and I do not want to reiterate what was said there. However, I would ask the Minister to comment on four issues, some of which have been alluded to in previous contributions to the debate.
	First-to add to what other noble Lords have asked about responsibility-if we are talking about long-term, proactive adaptation, as we are, we are obviously in the business of long-term planning over a 20 or 30-year cycle and beyond, which is quite different from what we have been accustomed to in the past. The Environment Agency has rightly been given a central role in such planning. It clearly has to co-ordinate with the Committee on Climate Change, and especially with its adaptation sub-committee. Are effective arrangements for liaison in place, as this is different from the other areas of responsibility which have been mentioned? We are talking about responsibility for long-term planning, with adaptation being at the centre of this.
	Secondly, as the noble Baroness, Lady Fookes, mentioned, flood and water management, on the one hand, and drought and heat waves, on the other, seem to be opposites, but they are closely linked. We are in for much wetter winters than we have had in the past and longer periods of drought in the summers. The Bill contributes to these issues because it discusses dams and, as was mentioned, emergency restrictions on water use. We need a large-scale proactive attitude on the connection between floods and drought. Given the background to the Bill, are the Government following and learning from forms of water management in periods of drought that are being experimented with in other countries? For example, in India and Bangladesh, which have had more extreme versions of weather than we have ever had, a system of proactive conjunctive water management has been developed, and interestingly so. That is very important for farming because it is farmers who are most menaced by the new conjunction of flooding and drought. It would be worth while for the Government to take a direct interest in such experiments and to try to build them into the backdrop for further elaboration of the Bill.
	Thirdly, I am not sure that enough work has been done on insurance, which is a key aspect. The Minister alluded to it in his introduction but did not say much about it. One has to recognise that it cannot be wholly statutory, but there is a crisis of insurance in relation to flooding. The concordat that existed for some 40 years between the UK insurance industry and the Government, who provided flood cover for all homes without regard to risk, broke down in 2002. Negotiations continue between the insurance industry and the Government, but so far all they have is a list of general principles which could leave large chunks of our assets uninsured. Total assets at risk from sea flooding, inland flooding and coastal erosion are calculated at £228 billion, which is a truly formidable sum. Does the Minister agree that more work needs to be done on this?
	Fourthly and finally, I shall allude briefly to the European Union, which was mentioned in a slightly critical vein. The noble Lord, Lord Taylor of Holbeach, mentioned his home in south-west France. That region has experienced more extreme weather during the past four or five years than it has at any other time in its history. A terrible storm swept right across Europe, through the south-west of France and on to other parts of southern Europe. It is plain that we need to co-ordinate with the European Union on extreme weather. As an island, we do not have the same relationship to principles which apply to the Continent, but the European Union has developed a water framework directive which is a proactive water management scheme. It makes eminent sense for the UK to give direct attention to, and monitor, the efforts of the Commission to deal proactively with long-term adaptation. Extreme weather conditions do not recognise national boundaries.

Baroness Byford: My Lords, I welcome the Flood and Water Management Bill and accept that it is a revised version of what was originally planned. I listened with great interest to the noble Lord, Lord Smith of Finsbury, and agree with him about the need to define roles and responsibilities. When we debated floods and flood management in this House before, the one question to which I kept coming back is: who is ultimately responsible? Responsibility fell into too many different camps and there seemed to be no direct co-ordination. I therefore thank the noble Lord for his contribution. I remind the House of our own family farming interests although, unlike those of my noble friend Lord Taylor of Holbeach, they are set in an inland context and are not at the moment likely to be challenged in the same way.
	Flooding is caused by many different factors. The most recent floods, in 1998, arose mainly because the rain fell so steadily and heavily for 12 hours or more. It fell in the end on saturated ground and had nowhere else to run, leading to flooding.
	Another issue which I have raised in the House several times previously is fly-tipping and the failure to keep our ditches and waterways clear. Can the Minister say how many cases of fly-tipping have been taken to court, and how many led to fines? If my memory serves me correctly, a huge number of fly-tipping cases are reported but very few are taken to court. If material is put into ditches, as is often the case, it blocks the flow of water which would be of help in heavy flooding.
	I shall not go over the ground covered earlier by noble friend; rather, I shall pick up on just one or two specifics. Fly-tipping is one of them. I presume that it is the responsibility of the Environment Agency rather than of local government, though I could be wrong about that. I should be grateful for clarification. Another matter that we have often discussed in the House before is the granting of permission for new housing development, even within known flood-plain areas. Clarification on that would also be helpful.
	The noble Lord, Lord Giddens, and others mentioned insurance. In some of this country's previous flooding experiences some householders were not properly insured and some were not insured at all. I wonder whether the Government have given thought to the responsibility of the householder to cover themselves in some way, or whether one should just wait until there is a big, unfortunate episode when the Government will provide money to help people. It seems very unfair that those who pay for some form of insurance should find that others who have no insurance at all are bailed out by the Government or the local authority. I have not picked up this issue in the Bill but wonder whether it is not something to be considered.
	Before I leave the question of how we can slightly lessen the risk of heavy flooding, I want to raise the issue of how so many more of our smaller roads are now used by larger vehicles. When two vehicles meet on some of those roads they have to pull heavily onto the side verges, and sometimes the verges are pushed into the ditches. It is a small point, but it is something that is occurring more frequently.
	I was interested recently to read Climate Change Mitigation and Adaptation in National Parks, which contained a case study concerning the handling of the increased rainfall. It said:
	"The key to avoiding damage is regular clearing of drains so that they can help with the quantity of water".
	The Lake District National Park now trains volunteers to do this. In the first nine months of 2009, it recorded 316 volunteer days spent on drainage clearance. Tragically, at the moment, so many people are unemployed. Perhaps some could assist with aspects of this sort of work. It might be an idea at least to consider.
	I pick up a point raised earlier by my noble friend about mapping and keeping maps up to date. I presume that that will be the responsibility of Environment Agency, but it will come at a cost. I should like to consider the cost issue. Presumably, the Environment Agency has estimated what it will cost to set up such a service and how many people would be employed in it. I would be grateful for some information on this from the Minister. This is a worry not only for the Environment Agency but for local government. Clearly there is a cost not only in cash but in providing the skills and training needed to ensure that it has the relevant people in the right place at the right time.
	Like other noble Lords, I am particularly keen that we should look again in Committee at Clause 43. I am unhappy about the proposals as they stand. We talk about unaffordable rises and the fact that Ofwat will have the overall say, but there is no description of what is considered accessible and fair. That is left to the discretion of Ofwat, over which no one has control. Two questions arise from that. Will there be a review after a certain period, and will there be an appeals mechanism-for instance, for voluntary groups, charities, churches or whoever else is affected by the clause-to enable them to come back and get further information?
	In welcoming the Bill, as I do, I come back to my concern with the Environment Agency-though certainly not with the leadership of the noble Lord, Lord Smith. Over the years, this agency has taken on more and more responsibilities. I would hate it to be in the position that has befallen the Rural Payments Agency, which I have often spoken about in this House. There is also the issue of sheer cost. For example, the process of paying a single farm payment for an English farmer costs £1,740, compared with £285 for a farmer in Scotland. That is crazy. It is absolutely ridiculous. Surely we should have a system in which that could not happen. As the National Farmers' Union has explained only recently in an article in the Daily Telegraph, if we lowered the English cost to £500 per payment, it would save some £100 million. The Bill will involve large costs and I am very anxious that the work involved should be done in a professional manner, as I am sure it will be. That will involve reviewing the costings incurred in the initial stages and then the subsequent ongoing costs.
	Those are the clauses in which I am especially interested. I am grateful to the right reverend Prelate the Bishop of Exeter for raising the issues of churches and charities. I am unhappy that, at this stage-though we will discuss it later-the matter is left to the discretion of individual water companies. That should not be the case. Nor do I like the use of "may" in this context; it should be "must". If it is not, this will create a whole area where companies can shrug their shoulders and say, "Well, we'll do it differently here", when I am sure that that is not the Government's intention. With those few words, I say again that I certainly support and welcome the Bill. I hope that it will see the light of day.

The Duke of Montrose: My Lords, once again I declare that I am a farmer and a member of NFU Scotland. We can all be very grateful to the Government for bringing the Bill forward at this time, even though the legislative programme is under considerable pressure. As many other noble Lords have said, this legislation already has quite a history in its consideration at various levels in government; I think that we would all like to see its main points on the statute book. Even so, it leaves some lingering doubts about the outcome of its implementation.
	As my noble friend Lord Selborne has just pointed out, there had to be an element of putting the cart before the horse in that, in legislation, a Bill is normally followed by the relevant statutory instruments. In December, we had Statutory Instrument 2009/3042 on the assessment and management of flood risk in England and Wales. On its own, that placed all responsibility firmly in the hands of the Environment Agency. However, that seems to be the point where we were introduced to the concept of a "lead local flood authority". As far as I can see, the definition for that is only given in full legal terms in this Bill, so it appears that the earlier SI will in fact rely on this subsequent legislation.
	One thing that the statutory instrument required was the setting up of all necessary flood assessments. Judging from annexe C of the Government's response to the Pitt report, I see that a fairly detailed plan was put in place in December 2008, showing stages of progress and the dates for completion. If all has gone according to that plan, the national flood emergency framework should have gone out to consultation last December. Can the Minister tell us how that most fundamental proposal is progressing?
	This Bill goes once again into all the special arrangements for cross-border catchment areas. That will be familiar territory to many of your Lordships who were involved in putting through the legislation implementing the EU water framework directive in what became the Water Act 2003. As the noble Lord, Lord Smith of Finsbury, reminded us, it would have been naïve to think at that time that we had done all the legislation necessary to deal with water. Now we have a new EU measure and a new Bill. Much of that Bill concerned the water industry and, like this one, contained powers and provisions for action in time of drought. Clause 36 contains amendments to the provision for temporary bans on water use in the Water Industry Act 1991. My noble friend Lady Fookes drew attention to Clause 47, on consolidation. Is this provision expected to run in parallel with the provisions in the 2003 Act, and can the Minister be sure that this will not leave room for some confusion?
	The Bill sets out to deal with coastal erosion and flooding. It contains some fairly sweeping powers for the Environment Agency and the Secretary of State. The exercise of these powers will enable them to make some sizeable changes in both of these areas. In support of my noble friend Lord Taylor, I come back to the question raised by the NFU of England in its briefing, on whether the Environment Agency will also have regard to the strategic needs of food production. This responsibility, I presume, should rest on the shoulders of the Secretary of State. However, this area can be explored in Committee.
	Another aspect that concerns me is flood risk management, which is covered in Clause 7. It is generally thought that to avoid flooding in built-up areas it will be necessary to allow flooding in currently rural agricultural areas. We can all be grateful for Schedule 1's provision for the consideration of compensation for any losses incurred by third parties. However, it would be interesting to know whether the Government will consider as part of that cost the fall in value in areas that are to be opened up for flooding, but which are not subject to flooding at present, let alone the task of clearing up the debris that inevitably occurs when flooding is allowed to take place. My noble friend Lord Taylor spoke of Cumbria and Cockermouth. This is currently a major issue in that area.
	Payment can well be considered as part of the implementation of the national element of the national risk management strategy. It will not be as easy when these issues have to be considered at a local level and funding provided at that point. I would also probe the practical meaning of Schedule 4 in amending the Reservoirs Act 1975 and introducing a definition of a high-risk reservoir. Is the purpose of this to produce a category of risk that is even greater than was foreseen in the Reservoirs Act as it is? It is my understanding that in carrying out the inspection of reservoirs at present, one of the tasks of the engineer is to specify into which of three categories of risk a reservoir falls. I have had some experience of this. Can the Minister outline how this is likely to change?

Lord Dixon-Smith: My Lords, I follow every other noble Lord who has welcomed the Bill. It is good to see, at last, an attempt to clarify the strategy and responsibility for flood control and management. There is, so far, an unmentioned and invisible elephant in the Chamber. We need to get it into the open because I am certain that, in due course, it will cause the noble Lord, Lord Smith of Clifton, who will have national responsibility for this beast, a great deal of problems. What we have not so far mentioned, in all this talk of management of risk, is the level of acceptable management which we are prepared to consider and fund.
	After major breaches in Essex in the early 1950s, the sea walls were raised. However, the passage of time and weather has now left those walls so that they are in a satisfactory guaranteed state for a once-in-25-years level of flooding. Once in 50 years is very dodgy; once in 100 years large parts of Essex will be under water. The same applies to flood plains. I know somebody who lives in a house that was built in the 16th century. It has never been flooded before. In 2001, that house was flooded, as were a number of others. The Environment Agency locally then said it was a one-in-800 year flood. Subsequently that has been amended to a one-in-500 year flood. But fundamental questions arise from that. Can one possibly rationalise building protection for a one-in-500 year flood? That would be extremely difficult to justify; perhaps it could be justified if the risk were changed to once in 100 years. These are important matters because they affect insurance for individuals. The resident in that house, because it has been flooded, has been designated as living on a flood plain, and the insurance premiums have risen proportionately. This becomes an expensive issue. Is it rational to insure against a one-in-500 year flood? That is a very difficult question to answer.
	The noble Lord, Lord Smith of Finsbury, is back in his place. He, above all of us speaking tonight, will have to wrestle with this issue. He has my sympathies because this will become a very difficult problem, which will involve returning to the whole question of funding this area of work, what we are prepared to pay for and what we are prepared to do. The issue has not been raised and I really thought that this great monster must be brought into the open before anything else, because I am sure that it will engage us all on many occasions in the coming years.
	I was interested to observe that in the Bill there are 21 clauses establishing a clear and interesting structure for managing floods, flood risk and flood control. All of a sudden, Clause 22, almost as an afterthought, refers to the regions. One can imagine one of the people responsible for drafting the Bill having a momentary brainstorm and saying, "Oh, my lord, we have forgotten the regions". There is a clear structure that includes the Environment Agency and the lead local flood management authorities. Suddenly in the Bill we find a new category; the Environment Agency must establish regional committees for consultation, whose members may be paid. They have no executive function or responsibility for flood control. If my memory is correct, they may raise a levy, although I am not sure what that will be for, because there is no information in the Bill on that. I ask myself why this peculiar structure has suddenly been added to the Bill. I know that there is a regional structure, but that already exists. The Bill requires the Environment Agency to establish a different structure. We are in some difficulties. It would be entirely appropriate if there were to be the river basin structure that we have been calling for and to which the noble Lord, Lord Cameron of Dillington, referred. But that is not in the Bill. We shall have to devote some time to that tricky constitutional question.
	I should declare that I am a farmer in Essex, which is one of the driest counties in the country. Flooding may not be thought to be a huge problem there, but it can be. I wish to talk about Schedule 4 on reservoirs. I have a reservoir which I had built in 1961. It is far bigger than the 1,000 cubic metres that is talked about, so I have a vital interest in it. I built it for irrigation purposes. I am not a big farmer, but in the days when I was irrigating it was not at all unusual for me to use something pushing towards 3,000 cubic metres of water in a season. From the point of view of having a farm reservoir for irrigation purposes, the 1,000 cubic metres limit is remarkably low.

Lord Smith of Finsbury: I thank the noble Lord for giving way, but I should point out that the registration threshold in the Bill is 10,000 cubic metres.

Lord Dixon-Smith: I stand corrected and apologise to the House. I have done what my wife often does-she forgets to add a nought.
	My reservoir stores what would otherwise be run-off. I have long argued that there is no shortage of water; there is a massive shortage of conservation. Agriculture is a significant issue as it will be required to increase productivity. The demographic problems that we face globally will inevitably mean that we must maximise agricultural output, and irrigation will play an increasingly significant role. The last thing we need is a system that might prove to be a disincentive towards the construction of irrigation reservoirs. I agree absolutely that an inadequately constructed reservoir in a narrow hill valley in South Wales is a danger to the communities below. That was the reason for some of the original reservoir legislation passed in the 1930s. My own reservoir was subject to that legislation and it will now be subject to this Bill.
	We need these reservoirs but there is a world of difference between a reservoir in a hill valley and one in a flat arable area. If my reservoir were to flood, which I do not think it will, the only person who would be affected is me. It would certainly flood my field. There is a level of risk. I note that the Bill provides power for the Minister to make regulations and to give guidance, which is an area that we will have to probe at later stages to ensure that it is clear how we define risk.

Lord Redesdale: My Lords, I start by declaring a couple of interests. I am just about to be made a non-executive director of Watertight, which is a company that deals with making houses secure from flooding-especially sewer flooding-and I am chairman of the Anaerobic Digestion and Biogas Association. I also own a pub in Northumberland. That is not strictly relevant but I thought I would add it anyway.
	An interesting way in which to start the debate, which makes it entirely topical, is to note that the front cover of the Bill states:
	"Lord Davies of Oldham has made the following statement under section 19(1)(a) of the Human Rights Act ... In my view the provisions of the Flood and Water Management Bill are compatible with the Convention rights".
	I mention that because in 2008 we passed the Climate Change Act and I wonder whether it is about time to start to consider whether a declaration should be made by the Minister on whether legislation is compliant with that Act. It would be topical because the noble Lord, Lord Davies of Oldham, did so much to help in its enactment and because there are aspects of it that need to be considered in the case of climate change. The whole issue of flood and water management is based around climate change.
	I understand the science of climate change-it is difficult to declare, or for a scientist to claim, that any one of the recent floods has a direct correlation as a climate change event. However, the large number of flooding events can be seen as an indication of a changing climate. The noble Lord, Lord Dixon-Smith, mentioned the problems in Essex: this was very pertinent considering that sea-level rises are about 3 millimetres a year and could well increase. We are standing next to the River Thames: when the Thames Barrier was built, it was not expected to be raised on such frequent occasions, and there is real talk about building a further barrier.
	Although it is not in the Bill, I must mention our support for ongoing efforts to build a sewer under the Thames to divert all the flood water that washes so much sewerage into the Thames on such a regular basis. The noble Lord, Lord Addington, and I saw the direct effects of this when we went out training for the Lords and Commons rowing race just after heavy rains-going down the Thames was a particularly unpleasant affair.
	However, I go back to the issue about compliance with the Climate Change Act because I notice that an opportunity has been lost in the Bill. In the Energy Bill that is before the House even further stringent measures are being taken to increase the primary duties of Ofgem to deal with sustainability. The noble Lord, Lord Greaves, discussed what sustainability actually means; many planners and people in local authorities are starting to read sustainability in relation to the issue of carbon emissions. There is a real opportunity here which has been lost. In the Energy Bill we are increasing the duties of the regulator to deal with climate change, but it has been completely neglected in the Flood and Water Management Bill. Before we reach the Committee stage, will the Minister consider adding the wording that is in the Energy Bill to the Flood and Water Management Bill so that Ofwat is given a duty to consider the issue of climate change over and above the cost implications?
	This is extremely important. As I mentioned, I am chairman of the Anaerobic Digestion and Biogas Association. Ofwat has taken a strict regulatory viewpoint. I was at a meeting with Ofwat recently where it said it would love to encourage the introduction of renewable energy schemes and anaerobic digestion but it is limited by its primary duties. The Government really will have to think about changing Ofwat's primary duties. The noble Lord, Lord Oxburgh, who is in his place at the moment, introduced a very fine amendment to the Energy Act 2008, which is now raising some considerable issues and is one of the reasons there has been a change in the current Energy Bill. The Government took on board his amendment and introduced a provision that Ofgem has to consider the good of past and future customers.
	This could be read across into the Flood and Water Management Bill in an interesting way. I should be interested to hear whether the Minister believes that my reading of this is correct. Under the Flood and Water Management Bill, the Environment Agency is able to direct who should pay for flood defences. I should have thought that under the provisions in the Energy Bill Ofgem has a responsibility, in considering the good of past and future customers, to direct the payment of flood defences for electricity sub-stations-especially after the floods in Tewkesbury, which almost took out one of the sub-stations. This would have left about 250,000 electricity users-though I am not entirely sure-without power for a very long period of time. If my reading of that is correct, then under the Flood and Water Management Bill the Environment Agency, under the noble Lord, Lord Smith, would be able to give direction to Ofgem to require that the energy companies provide adequate flood defences for all sub-stations in flooding zones. If that is the case, the Bill will have quite interesting cost implications.
	I very much hope that my reading of this is correct. Obviously, dealing with the regulators is a somewhat tortuous affair but I believe that there could be a case for judicial review if they took the opposite view and felt that they were not responsible. If would therefore be helpful if the Minister could clarify the situation. If he is not in a position to do so at the moment, it would be very helpful if he could write a letter on this subject giving me an indication of the situation. However, I very much hope that, having agreed that the regulator in electricity and gas markets should take seriously the provisions of the Climate Change Act, the Government will think carefully about transposing the provisions, which they produced and which were enacted before Parliament, straight across into the Flood and Water Management Bill. From speeches that have been made by many Members of all parties in this House, I am absolutely certain that that would have considerable support.

Baroness Young of Old Scone: My Lords, I speak as a former chief executive of the Environment Agency and as a current member of the climate change adaptation sub-committee. I thank the noble Lord, Lord Giddens, for his kind words about the current and past management of the Environment Agency.
	Seeing this Bill come to the House is a bit like having one's birthday and Christmas rolled into one. It contains a huge number of issues that I have worked on and lobbied for in my many incarnations in the past and which were then supported by the Pitt review and the work of Anna Walker. Therefore, it is a delight to see the Bill finally arrive here.
	I want to welcome a few of the cherries in the Bill and talk about some of the areas that I think still need clarification, as well as some outstanding issues that the Bill does not address. First, I very much welcome the proposals concerning reservoirs. There are a number of examples of incidents from reservoirs around the 10,000 cubic metre threshold. It is important to achieve that threshold but then to manage the process on a risk basis, taking into account that risk analysis and making sure that only reservoirs that pose real risks come under scrutiny and that unnecessary regulatory impact is reduced.
	Secondly, I turn to the registration of third-party assets. About 55 per cent of all flood defences-for example, railway embankments, house walls, warehouse walls and a variety of other things-are owned by someone other than a public authority. It is important that the Bill brings in a proper registration and management system for those third-party assets, which are fundamental to the future of flood defence in this country.
	Thirdly, I turn to a point that has not really been raised so far in this debate-that is, the proposed changes relating to habitat enhancement work. I know that they were rather controversial in another place but I hope that the provisions that are now in the Bill regarding consultation on these works will reassure noble Lords.
	Fourthly, the whole issue of sustainable urban drainage and the associated right of connection will, I hope, mean that we can move forward and produce a much more effective process for drainage management in this country. I also very much support the idea of social tariffs for water customers and the ability of companies to apply such tariffs. If we are to tackle impending drought in this country, particularly in the south-east, where there are further pressures from development and population, as well as from climate change, we will need to see a very fast move to near-universal metering in areas of water stress. Of course, although metering can reduce the consumption of water by up to 20 per cent, it can produce pressures for poorer households through increased bills. Therefore, it is important that companies are able to offer these social tariffs.
	The noble Baroness, Lady Fookes, reminded me of the importance of temporary hosepipe bans. Like her, I am a keen gardener and very much appreciate the work that the Royal Horticultural Society has done in looking at these bans. There is a whole range of other ways in which water can be saved. It is important that those are addressed as well to avoid and reduce the need for other bans. We want to see increased metering, as well as low-flow household appliances and fixtures and fittings. We want building regulations improved so that when houses are being refitted, they are refitted in a water-efficient manner, as well as a whole variety of other mechanisms that would take the pressure off temporary hosepipe bans. However, I appreciate the work that has gone in to clarifying when the hosepipe ban should be applied.
	The centrepiece of the Bill is the issue of clarifying responsibilities, particularly giving local authorities responsibility for the management of surface water flooding. I remember well the floods of 2007. One tends to remember events like that and I am sure that many of the people who were out of their houses for many months as a result of those floods, and indeed in the more recent Cockermouth floods, also remember them well. A substantial part of the flooding during the 2007 floods in places such as Sheffield and Hull was caused by surface water. This Bill is long overdue in giving clarity of responsibility to local authorities to tackle surface water flooding in conjunction with the Environment Agency and its responsibility for riverine flooding.
	Although I welcome the clarity of responsibility, there is still an area where there is a lack of clarity. I regret that the proposal to clarify the respective roles of the Environment Agency and the regional flood and coastal committees was removed from the Bill as a result of controversy in another place. There is still an element of lack of clarity about who actually carries the can, if that is not the wrong way to put it, in terms of flooding. Sometimes the most effective way of examining whether there is clarity in responsibility is to ask who we would blame if things went wrong.
	When I was at the Environment Agency, I felt very uneasy about what could happen when the Environment Agency proposed the regional programmes of flood defence but the committees had the role of approving them. In those circumstances, one could be led to believe that the committee had the ultimate authority and, therefore, would be the body to blame if something went horribly wrong. I assure your Lordships that that is not what happens. What happens is that everybody blames the Environment Agency.
	The reality is that there is good co-operation at a regional level between the Environment Agency and the regional committees. Therefore, that has not yet become an issue. However, I put a marker down that, if at some stage we were to have a catastrophic flood with substantial loss of life-and I hope we never do-we would have to revisit that area of lack of clarity about responsibility.
	Irrespective of the clarity that the Bill gives nerdy folk like you and I as to who does what, there are still many people and bodies involved in making decisions about flood risk management in this country. I suspect that the clarity in this Bill is not necessarily sufficient for the public. They will still feel very confused as to whether it is the responsibility of the regional flood and coastal committee, the Environment Agency, the local authority, the IDB or the water company. Although all those organisations may be working very well together, I wonder whether it is worth considering the propositions that were mooted some time ago of having a first-stop shop or single point of contact where the public can go and be led to the right authority by someone knowledgeable who understands the nature of the flood experience that they are having or the query that they are making so that they are taken through what will still be quite a complex system.
	The Bill does not resolve the issue of money, which has two dimensions. First, there is the issue, which I am sure will come up in Committee, of funding for local authorities for their new surface-water drainage roles and certain funding for local authorities in their new roles with sustainable urban drainage systems. Nevertheless, while the work of the committee announced by the Minister is undertaken, I hope that we can encourage local authorities not to sit and wait for resolution of the funding issue. I believe that the public are anxious that the issues of surface-water drainage and sustainable urban drainage are gripped now and I urge local authorities not to wait for the resolution of the funding issue but to begin to put in place the very necessary plans and programmes which will be required.
	The second money issue is the Environment Agency's own long-term investment strategy, highlighting the need for about £1 billion of investment per annum in the next few years, if we are to tackle the challenges of decaying flood defences and increased pressures as a result of climate change. I know that asking questions about money at this time in the economic cycle is a waste of time; I am simply putting down a marker that those questions do not necessarily go away just because we are broke. The investment outlined in the long-term investment strategy was reasonable to counteract the worst risk, but not every risk.
	I hope your Lordships will enjoy this wonderful Bill. I hope its passage will be fast, as it is most important that the wretched thing gets on to the statute book so that everyone can work together to help to protect the nation from floods and to pick up all the other water issues included in the Bill.

Lord Sheikh: My Lords, at the outset I declare an interest: I am the chairman of an insurance broking organisation. I welcome this Bill as I recognise that a binding agreement on flood risk management is long overdue. The recent floods in Cumbria caused widespread devastation, surpassed only by the 2007 floods which resulted in 13 deaths and extensive damage to properties at a cost of over £3 billion. The Environment Agency announced that the severe flooding in Cumbria last year was a phenomenon to be expected only once every thousand years. Although the circumstances were unforeseen, they can serve as a catalyst for better flood preparation in the future.
	Many homes and businesses have been ruined by the effects of torrential floods; livelihoods have been shattered and in some cases, irreplaceable items have been destroyed. The Association of British Insurers has estimated that payouts resulting from the floods in Cumbria alone will be made in the region of between £50 million to £100 million, and may even surpass that figure. Flood damage has caused considerable losses to the insurance industry, which may result in the charging of higher premiums and application of terms in areas which are prone to floods. One in six homes in the United Kingdom is at risk from flooding. Better flood management and funding is essential to provide those at highest risk with adequate assistance.
	In many instances the psychological damage caused by these floods will be difficult to overcome. Affected communities should be given additional emotional support through initiatives such as counselling for those who wish to make use of the service. The Bill provides developers with the responsibility to make sustainable drainage systems available in housing and commercial properties. An effective framework is needed to minimise the economic and social upheaval caused by flooding. Central and local governments must work together to successfully tackle flooding and give leadership to local communities on how best to prepare and equip themselves for floods.
	There is growing concern that many individuals are unaware that they live or work in areas that are prone to floods or coastal erosion. A number of people in Cumbria did not arrange insurance cover and, as a result, have suffered financial hardship. What steps will the Government take to raise awareness of possible flooding in high-risk areas so that individuals can seek adequate insurance protection? There are specialist insurance brokers who can provide appropriate cover in areas which are prone to flooding. This legislation must end the confusion over which bodies have responsibility for flood-risk management. Although the Environment Agency should have an overview of all types of flooding, local communities have an important role to play as their knowledge and expertise is crucial to rescue efforts, both during and after flooding.
	The Pitt review called for the allocation of clearly defined roles for flood management. It is encouraging to see that this recommendation is a requirement of the Bill. I welcome Clauses 7 and 8 as they make it incumbent on the Environment Agency to devise a strategy for flood and coastal-erosion risk management in both England and Wales. We need, however, to examine details of these clauses at later stages of the Bill. The agency should have the full confidence of both central and local government-related agencies to adequately develop a strategy that is free from political or commercial bias. It is important for the agency to present regular reports to policy-makers that include independent flood-risk assessments which also detail funding requirements and proposals for dealing with imminent floods. The agency should also devise a long-term plan for flood-risk management and must be given responsibility for creating accurate, national flood maps covering all sources of water damage to be made available to the public. There are opportunities for the Environment Agency to consult with tertiary institutions to promote the research and skills required for effective flood and coastal-erosion risk management.
	I support Clause 13 as it ensures that local authorities communicate and co-operate with relevant bodies concerning flood and coastal-risk management. Resources such as flood maps are essential to the industry. There is scope for local agencies to collaborate with the Environment Agency in the production of local flood-risk maps. Local authorities have the potential to become the leading agencies in charge of assessing local flood risk in specific areas. Insurers and loss adjusters have a duty to advise local communities susceptible to flooding whether they should build in flood resistance to best prepare their homes for possible floods.
	I welcome the provision which grants greater power to local authorities when managing flood risks as they are best placed to deal with the initial effects of flooding due to their knowledge of their areas. The proposal to promote multi-agency co-operation is also encouraging. A lack of broad agency collaboration has been cited as one of the barriers to effective flood management. Local authorities must work in concert with the Environment Agency to enable the development of a national overview of surface-water flood risk.
	I agree with Clause 35 which proposes to regulate the provision of infrastructure by a third party for the eventual use by water or sewerage undertakers. I support Clause 36, which amends the Water Industry act 1991 to enable water companies to prevent or restrict the use of water at times when serious shortages occur, or are at risk of occurring. We have had situations in this country when there has been a lack of rain and a shortage of water. The use of water must be controlled under these circumstances. However, we must work out the details, perhaps in the form of issuing a suitable code. I will add that during the last drought, I lived in a house with five acres of grounds and encountered great difficulty in keeping my plants alive because of the hosepipe bans.
	Water companies should be free to impose charges for connecting new developments to give access to sewerage and water networks. They also have a duty to ensure that new developments do not increase the risk of future damage. Clause 38 allows the Environment Agency to engage in works that may cause flooding, provided this is in the interests of natural conservation or civic enjoyment. I hope that the conditions of the clause will be examined in more detail in Committee.
	We need to examine the provisions of Clause 39, which allows lead authorities or internal drainage boards to carry out works under certain conditions that will or may cause flooding, an increase in the amount of water below the ground, or coastal erosion.
	I welcome Clause 42, which introduces a new section into the Water Industry Act 1991 that requires the owners of premises and sewers to connect with the public sewer. This requirement is, first, on the proviso that an adoption agreement exists between the owner of the sewer and the sewerage undertaker; and also that the agreement must include details concerning the standards that the constructed sewer or drain should meet. In most cases, repairs will be carried out in accordance with the same regulations that did not prevent water damage occurring in the first place. I would like to see a provision that will ensure that construction repairs are made in such a way as to prevent future floods from causing the same degree of damage. This would in turn reduce the costs and the level of disruption to local community groups. I recommend that local housing authorities be asked to provide low-cost insurance in high flood risk areas, perhaps on the lines of tenants' contents insurance with rent schemes. This should gain wide support.
	I am concerned at the number of householders and businesses without appropriate insurance who, in the event of flooding, will encounter financial and personal hardships. It is encouraging to witness broad political consensus for the majority of proposals in the Bill. I am confident that it will be adequately strengthened during its passage through your Lordships' House. We have a duty to ensure that the Bill greatly contributes towards managing the rising threat of water damage, which is critical for the 5 million properties nationwide that are most at risk of flooding.

Lord Tope: My Lords, we have had a good and interesting debate this evening. It is pleasing to reflect that, particularly so close to a general election, we have such an important and significant Bill before the House and such widespread support for it from all corners of the House. That is a tribute, first, to the work of the Environment Agency in helping to bring us to this point. I will say from these Benches that it is a tribute, secondly, to the way in which the Government have approached the Bill, particularly in the other place. As the Minister said in his opening comments, there was a collegiate approach and a willingness to listen, to consider concerns, to reflect on them and, in a number of cases, to come back and address them before the Bill left the other place. All that is welcome and contributes to the general support that the Bill has received this evening. Nobody has said anything other than that we all wish to see the Bill on the statute book as soon as possible. I repeat the commitment given by my noble friend Lord Greaves when he opened from these Benches that the Liberal Democrats will do all that we can to co-operate and ensure that the Bill reaches the statute book by the end of this Session.
	However, the debate has been going on because there are still concerns. Many of them have been raised and many questions have been asked. Many references have been made to what we must explore in Committee but, with the exception of my noble friend Lord Greaves, we have been carrying on as if what we know is going to happen is not going to happen at all: the general election and the dissolution of Parliament. If the general election is to be on 6 May, then dissolution must take place not later than 12 April, which is the Monday after Easter Monday-in other words, immediately after the Easter Recess, or quite possibly before that.
	Time is very short and we do not realistically have time to go through the normal processes of this House in examining and scrutinising the Bill. That is a great shame and a matter of great regret, because the Bill has so much general support. That might sound contrary, but what this House does particularly well is asking questions and probing the Government not so much on what will happen but on how it will happen. That is where many of the concerns still arise. They are not about what we are going to do, as there is broad agreement about that, but about how we are going to do it, as that is still unknown and untested. What this House does well, partly because we do not have the time constraints that the other place has, is pressing the Government to make them think about that and work through the process not just in Committee, where the questions are asked, but on Report, when some of the answers come back-even at Third Reading we can come back and make a good Bill an even better Bill. I regret that we almost certainly will not have time to go properly through that process.
	I am tempted to ask the Minister to give us the date of the general election. I suspect that he probably will not, so I shall try another tack. Can he tell us when Parliament will be dissolved? If he will not do that-and I suspect that he will not-I hope that he will give as much reassurance as he can that there will be a Committee stage for the Bill. There is a suspicion that the Bill is having its Second Reading because it must in order to get into the wash-up. None of us would dispute that, but once it has had its Second Reading it does not need to have any further consideration because there is such general support and it will be carried through during the wash-up. I therefore press the Minister, not with great expectations, to indicate to us what dates the business managers have in mind for Committee, should the Prime Minister allow us to have one. I hope that the Minister will do that, because the Committee will be an important part of the consideration of the Bill, even if we are not able to go further with it. It will guide us in the discussions that will take place in the wash-up.
	There are a number of outstanding concerns, most of which have been aired tonight. I lead for our party on local government, so let me start with some of the concerns coming from local government and from the Local Government Association. At this point, I have to declare my interest. I do not own a pub-sadly-but I am a London borough councillor. The London boroughs have been unitary authorities since they were created 45 years ago, so I do not have a personal interest in districts and counties and two-tier authorities. However, that is one of the concerns about the approval process for SUDS-I cannot help wondering about SUDS and wash-ups at this stage. As my noble friend Lord Greaves said-he is a district councillor and a former county councillor, so has far more experience than I have-to give the power to approve SUDS not to district councils, which are planning authorities, but to the county authorities, which do not usually become involved in development control matters, must at best be a recipe for delay, for more bureaucracy and for more duplication. It is not sensible. That view is quite strongly supported by the Local Government Association, which represents both district councils and county councils and often declines to take a view where there are such disagreements. There is a strong measure of agreement on this important issue and I hope that the Government will consider it further.
	The next issue that all local authorities would raise at any time but particularly given the financial outlook ahead is the funding burden. I agree entirely with the noble Baroness, Lady Young of Old Scone, that no one will try to hold up either the enactment of the Bill or more particularly its implementation while we try to resolve the funding issues. The Local Government Association regrets-I am sorry, rejects, although it also regrets-Defra's funding model on two fundamental grounds. It is not necessary to set them out tonight because they are well known to Defra.
	In Committee in the other place, the Minister gave a commitment to set up a group involving Defra and the LGA to assess the costs and to look at how they are funded. I understand from the LGA that, although that commitment was given in Committee in the other place, the group does not even have its terms of reference yet, let alone the call to its first meeting. I therefore hope that the Minister can give us some encouragement about the progress that will be made in setting it up so that it can get on with trying to resolve these important issues, even if we accept that the Government are not going to delay enactment or even implementation.
	Other concerns will be referred to the group, but because the group does not yet exist they cannot have had any attention paid to them. One concern is about the skills and training that are needed for the new flood authority role. Another is the sustainable funding system for SUDS. I hope that the group will be convened soon to look at those issues and that we will have news of progress during the Bill's consideration, whatever that will be, in this House.
	A number of other issues were raised, including the community groups and the concessionary charges to which the right reverend Prelate the Bishop of Exeter and my noble friend Lord Addington referred-I sometimes think of my noble friend as a boy scout, so perhaps that is where this comes from-and the role of Ofwat in all this. These are important issues and if we can have a proper Committee stage we can tease out more from the Government. My noble friend also talked about the "may/shall" issue. In other words, is this voluntary, as it is in the Bill, or should it be statutorily compulsory? That is not an unusual question when we consider legislation and it is particularly important here, so we need time to consider the matter.
	Reservoirs were talked about and my noble friend Lord Greaves pointed out exactly what 10,000 cubic metres means. We sat in the Royal Gallery and said that we do not have a concept of what 10,000 cubic metres is like. The NFU described it as a small reservoir. I do not have the knowledge of reservoirs that the noble Lord, Lord Dixon-Smith, has. What is a small reservoir? It was explained to us that it is one and a half times the volume of the Royal Gallery, which gave me some concept of what it might be. Any catastrophic incident and flooding from it on that scale would have very serious implications for anyone living or with a business anywhere in the region. The Environment Agency is pretty clear that the vast majority of such reservoirs are unlikely to pose any risk at all. The noble Lord, Lord Dixon-Smith, illustrated one reason why that might be. However, if any of them do, of course they should be registered and of course we should know about it and of course something should be done about it.
	Questions of insurance have arisen again, which need to be probed and resolved. I was particularly interested in the speech by the noble Baroness, Lady Fookes. I speak as a small vegetable gardener-the vegetables are quite small, and so is the garden-in suburban London. I understand well the problems of hosepipe bans and the watering difficulties in suburban London. It was irritating to have lush green lawns while my vegetables were withering; nobody seemed to be doing anything about it. Issues like that need to be addressed. We need time to consider this excellent Bill and to address the concerns and questions raised in this debate. I hope that the Minister can give us some comfort on that. However, at the end of the day, we will pass this Bill and it will go on the statute book.

Earl Cathcart: My Lords, I begin by declaring my interest. I am a farmer and landowner and I am involved in property and insurance markets, all sectors which will be affected by measures in this Bill. Most of the measures we welcome, as my noble friend Lord Taylor made clear at the outset of this very informed and constructive debate. I share the concern that other noble Lords have expressed for the communities which have suffered such severe problems from flooding. I, too, recognise the pressing need for improving the way in which we prepare for flooding and manage our water.
	The Bill is a welcome start, but it is only a start. We have recently had the Pitt, Cave and the Walker reviews. We have, therefore, been provided with a very broad body of research to consider. The Pitt report alone has 92 recommendations, whereas this Bill has but 49 clauses. That may be a somewhat rough comparison, but I hope that noble Lords will accept the point that there is much more that we could be looking at today. However, I accept that we are probably pressed for sufficient parliamentary time. Instead, it will fall to the next Government, as the Minister said, to consider all these matters affecting the water industry in their entirety.
	I regret that the Government did not allow as much time in another place as was necessary to give full consideration to the Bill. At the Report stage, my honourable friends tried to debate reservoirs, infrastructure projects and temporary water use bans, but were unable to do so, so scrutiny was not quite as thorough as it might have been. It is very much my hope that sufficient time will be found to allow this House the chance to do its job and subject the Bill to rigorous scrutiny, but that, too, may be in doubt.
	My noble friend Lord Selborne talked of the importance in the preparation of maps and other information, particularly water catchment maps, which reinforces the remarks made by the noble Lord, Lord Cameron, and mentioned by my noble friend the Duke of Montrose. My noble friend Lord Selborne also called for the naming of who was responsible for each component part within the catchment area. That must be made clear.
	I join my noble friend Lady Fookes in congratulating the Government on Clause 47, which concerns pre-consolidation amendments. It was interesting to hear her informed remarks about building on gardens with hard impermeable surfaces and her idea of water companies allowing watering on certain days of the week. My noble friend Lord Taylor tells me that that is done in France.
	My noble friend Lord Taylor has set out our position on much of the Bill. Although, for example, we welcome the strategic overview role of the Environment Agency outlined in the Bill, which gives it a national responsibility for flood risk management, while local authorities will have responsibility for local flood management strategies, we have concerns that the Bill is too centralising. We would like to see a balanced and common-sense approach, with a clear definition of roles, to avoid the cumbersome and unnecessary overlapping of different layers of Government in the efforts to deal flooding. My noble friend Lady Byford reinforced the need to know who is responsible and for what. Where does the buck stop?
	As my noble friend Lord Taylor said, we will examine in Committee, we hope, the role that local authorities and communities, with their local knowledge, can play in the preparation for flooding. It was heartening to hear the assurances given by the noble Lord, Lord Smith, that the Environment Agency will be working closely with local organisations.
	My noble friend also touched on the Environment Agency's role of balancing whether the benefits of carrying out work will outweigh the damage to human health, the economy, infrastructure or the environment caused by the work. The question here is whether an unelected body should balance these competing interests and make these decisions rather than an elected representative, albeit with the Environment Agency's support. The original draft Bill did not give the Environment Agency the power to balance these competing interests; rather it allowed it to carry out the work only when it explicitly did not create or increase the harmful effects.
	There were also concerns that the Bill does not categorically end the automatic right for a new development to connect with the sewerage system, even if the system does not have the capacity to take the outflow from the new development. Although the Bill provides that all new sewers and drains must be built to universal build standards, it allows the connection of new sewers and drains to the public sewerage works even if these standards have not been complied with. The end of the automatic right to connect is one of Sir Michael Pitt's recommendations. We should like the Government to look again at this to ensure that no extra capacity can be placed on the system that might increase the risk of flooding of sewerage, a point referred to by my noble friend Lord Selborne.
	The adoption of the private lateral drains and sewers to water companies will help to consolidate the drainage system and will remove the risk of future liability and repair in the long term. However, we also believe that the 2011 timescale is unrealistic and that more consultation is needed and further clarity should be provided. Water companies have no idea as to the number of drains they will be adopting or if the adoption is to include private pumping stations. It has been a flawed consultation and not all those affected, including small family drainage companies and relevant bodies, were consulted. Therefore we should like the Government to consider proposals which ensure a full audit of all private drains to be transferred to establish the costs and implications involved.
	In Clause 27, authorities are placed under a duty to aim to contribute to achieving sustainable development when exercising a flood or coastal risk management function. Under Clause 27(2), the Minister must publish guidance about the meaning of sustainable development. I often find that the words "sustainable development" mean different things to different people. Can the Minister say what he thinks sustainable development means in this context and also indicate when we will see this guidance? It would be good to get this definition in the Bill.
	It is clear from the accounts we have heard from communities stricken by flooding that this Bill is timely, even if it is not as complete as it could be. As my noble friend Lord Taylor pointed out, many of the families affected by the Cockermouth floods have yet to move back into their homes. Can the Minister give us the number of families and businesses affected by flooding which are still waiting to return to their properties? If he does not have accurate statistics, will he consider the merits of the recommendation in the Pitt report which proposed a monthly update following major flooding incidents of the recovery process and the number of people out of their properties? My honourable friends tabled an amendment to this effect in another place. We will consider bringing back a similar amendment here. Such a measure may help focus minds and prevent victims of flooding slipping off the radar.
	My noble friends Lord Taylor and Lord Dixon-Smith raised questions on reservoirs, as did other noble Lords. How has the lower figure of 10,000 cubic metres, which is given in Schedule 4, been reached? I know that the Environment Agency is calling for it to be lowered to 10,000 cubic metres, but even it says that there have been only a handful of incidents at this level. Quite what "incidents" means, I do not know; "not life-threatening", I suspect. I understand that the last time a life was lost through reservoir damage was in the 1920s. I cannot see such a recommendation in the Pitt report. As my noble friend Lord Taylor mentioned, there could be an annual cost of £10,000 for carrying out risk assessments, which seems an excessive charge to levy on farmers and others who have done the right thing by capturing and storing water rather than extracting it from rivers. I hope that these measures will be about safety rather than putting extra burdens and costs on to small reservoir owners.
	I was encouraged to see in the Environment Agency's own briefing that, in some cases, the regulatory impact will be reduced for those who own or maintain low-risk reservoirs with capacities above 25,000 cubic metres. It says that this could mean as many as 400 to 500 low-risk reservoirs being effectively deregulated. That is certainly welcome, although the proof of the pudding will be in the eating.
	As is clear from our wide ranging debate today, there is an appetite on all sides to improve the way in which we approach the management of our water resources. The Bill could be more comprehensive and it could be better, and we will no doubt aim to improve it in Committee. We have raised a number of issues today and I look forward to hearing the Minister's response.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have contributed to a fascinating debate on a very important Bill. I record my pleasure and gratitude that all four noble Lords who spoke from the two Front Benches indicated their support in principle for the Bill. That did not stop them in any way, shape or form introducing their inevitable caveats, some of them quite principled. I shall do my best to indicate the Government's response to them.
	I assure the noble Lord, Lord Tope, who expressed those anxieties in their most graphic form, that we are of course planning for the Committee stage of the Bill. I cannot give him the precise date, because he will know that a short period has to elapse after Second Reading before Committee can begin, but we are planning-I cannot offer him greater assurance than that-to have a Committee stage on the Bill. I have the greatest confidence that we will do so, with the sole proviso that, if the general election intervened much earlier than any of us had thought, that assurance would not be worth a great deal. However, against the perspective that most noble Lords, I think, and most of the country think that we will run towards Easter at the very least before any significant announcement, we shall have a Committee stage on the Bill and seek to make progress. I am comforted by my confidence that there will be a Committee stage, because I am not sure how I would be able to respond in anything like a tolerable time to the many points that have inevitably been raised today and which presage Committee stage debates. Nevertheless, there are some quite fundamental issues at stake and I want to reply to them.
	The noble Lord, Lord Taylor, supported by his colleague, the noble Earl, Lord Cathcart, asked who bears responsibility and whether the Bill is clear on this. I had great support at hand. The noble Lord, Lord Smith, was able to speak on behalf of the Environment Agency about its role. He was supported by his predecessor, the noble Baroness, Lady Young. She said how much the Environment Agency and she had looked forward to a Bill that would seek to define these issues in the way in which this one does.
	The Bill sets out to ensure that all sources of flood risk are addressed and it provides clarity on who is responsible for what at both national and local levels. Local authorities will lead the management of local flood risk, while existing roles for delivery organisations will be retained wherever possible to ensure the continual engagement of local knowledge and expertise. It was suggested that our emphasis on the county councils in a particular role took away from the district authorities. We will retain a position where expertise exists, but the Bill provides the considerable flexibility that is necessary for delivery on the ground. It seeks to promote partnership, which is a concept behind the Bill that I stressed in my opening contribution. There is a requirement for all bodies to co-operate and share information. This is meant to be a co-operative exercise. The Environment Agency's national overview is formalised in its duty to prepare the strategy and guidance. This will support local roles and partnerships rather than prescribing actions.
	My noble friend Lord Giddens raised a dramatic additional dimension when he talked about the relationship of the Bill to climate change. He was supported by the noble Lord, Lord Redesdale. The Environment Agency is already involved in 100-year projections with regard to flood risk and coastal erosion. It is not a new concept that one has to project a long time ahead. I will come in more detail to the points raised by my noble friend Lord Giddens and the noble Lord, Lord Redesdale. The Bill fits within the necessity of addressing the very real issues of climate change.
	I was grateful that my noble friend Lord Giddens took time out to emphasise the rigour of the science that conditions all serious authorities in the world to address themselves to the issue of climate change, however inadequately in some cases, although not in our case-we have been very concerned about the issue and have given considerable leadership on it. It is important that we appreciate that the Bill is constructed within that framework. We have to come to terms with more erratic weather patterns and ones that have greater severity and impact on our citizens.
	The issue of reservoirs was raised by the noble Lord, Lord Taylor, in his opening remarks and he was followed in a most informed fashion by the noble Lord, Lord Dixon-Smith, who is the owner of a reservoir and therefore speaks with additional authority. The noble Lord, Lord Tope, and others went on to describe what 10,000 cubic metres of water might look like if it was contained at the far end of this Chamber and was let loose upon us all.
	The new approach to reservoir safety introduced by the Bill will ensure that the controls to be applied to individual reservoirs are proportionate to risk. Reservoirs that pose no or low risk to the public will be exempt from the routine supervision and inspection currently required under the Reservoirs Act 1975. This will be the case for many farm reservoirs, such as the reservoir of the noble Lord, Lord Dixon-Smith, which is one-tenth of the size that is mentioned in the Bill, as he will recognise, and those golf courses that contain supplies of water given their considerable use of it for the courses. We make no apology, however, for requiring the owners of reservoirs that could present a risk to people to take reasonable steps to manage those risks. We intend to keep the registration requirements for small reservoirs as simple and as straightforward as possible. We shall consult widely on the arrangements to be made and there will be no charge for registration, so I reassure the House that that matter has been considered very seriously.
	The noble Lord, Lord Taylor, inevitably stole some of the lines that he knew others were likely to pursue on the Bill. I do not blame him whatsoever for that, but he would have known, when he started to speak about the concessionary charges for community groups regarding drainage, that the right reverend Prelate was waiting his turn to make his case on them. He must also have known that the noble Lord, Lord Addington, was not going to talk about cathedrals and churches in this context, knowing full well that that would be presented elsewhere, but that he would bring the scout halls and community clubs into the picture.
	The Government are of course absolutely clear that we do not want community groups to face unaffordable increases in their water bills as a result of site area charging for surface water drainage and we expect undertakers to ensure that that is the case. Ofwat will ensure that undertakers have had regard to the guidance that we will provide when approving individual charges systems. We intend to address that matter and Ofwat will be charged with taking account of that guidance. We seek to avoid a situation that I recall rather graphically, because it was from the spiritual Bench that the question was first addressed in this House. I remember my shock when I realised just how much the costs had gone up; the right reverend Prelate referred today to those increasing costs for churches and cathedrals in particular areas. We will make sure that fairness obtains regarding that matter.
	The noble Lord, Lord Taylor, also identified, rightly-I think that the noble Earl, Lord Selborne, followed him on this matter-that the Bill does not provide for all the aspects on which the Walker or Cave reports enjoined the Government to take action in due course, after full consultation. Nor are we in the position that we are able fully to incorporate everything to do with the Pitt report. This is a relatively modest Bill, but it responds to the urgency of the situation and, with co-operation on all sides, we expect it to gain Royal Assent. That is why it is constrained by the timescale.
	Another point of the noble Earl's argument was that it was a pity that the Bill was introduced on exactly the same day as regulations that impact in this area. That was a coincidence in a period where, had we had a full parliamentary Session, we would have been able to address these issues from that time on. I reassure him that we expect the regulations and the Bill to be consolidated in due course. He is quite right that there is a considerable interlocking, if not an overlap, between the two positions.
	There were questions on water use. Again, the noble Lord, Lord Taylor, covered the point about anxieties over the code of practice regarding hosepipe bans and the noble Baroness, Lady Fookes, gave us a graphic illustration of what might go wrong because of uncertainty. We all know that there have been uncertainties in the past over how long such bans would last and so on. I emphasise that we welcome the great interest in this issue, reflecting that it is appreciated on all sides that we need to conserve water and that, from time to time, constraints will be enforced. It is essential that the water companies have some flexibility with regard to this response. The patterns can vary in different parts, even of England, so the necessity for a hosepipe ban in one area may not obtain in another. Different circumstances require different solutions.
	We will work with the water companies through the statutory drought planning process to ensure that their revised drought plans set out clearly how they anticipate using their powers, including their broad priorities for conserving water and the types of concessions or phasings they propose to introduce. We will also ensure that they take account of stakeholders' and customers' views. As a first step, we will meet the water companies when the Bill obtains Royal Assent to explore how they can work together and with stakeholders to develop a framework for managing the necessary flexibility of these powers, while at the same time giving the public the best service that they can and the greatest certainty about what is expected of them.
	The noble Lord, Lord Greaves, raised some fundamental issues. With the development of the debate, he probably thought that-a great deal having been said about the necessary role of the Environment Agency-he had some reassurance for his concern about significant infrastructure. We expect the Environment Agency to concentrate only on the most important features or assets in the most critical locations, where the consequences of removal or modification of the assets would be significant. It would take into account the current state of repair and whether an alternative arrangement is appropriate. I assure the noble Lord that we do not expect vast sections of crucial infrastructure to be taken out by the Environment Agency-far from it. It will work on the basis that it will act only within the constraints of great necessity.
	The noble Lord, Lord Greaves, also raised an issue with regard to Clause 27. We want to pin down more precisely in guidance just what is expected of flood and erosion risk management when carrying out such functions. The definitions in the guidance will be based on accepted definitions of government policy at the time. I know that the noble Lord will say, "There is a Minister seeking to avoid a precise definition in the Bill of sustainable development". The noble Lord, Lord Greaves, is best placed to know that sustainable development must be an evolving concept that follows change. In this framework, therefore, we are concerned that we use the concept in the guidance to guide the authorities. I am sure that the noble Lord, Lord Greaves, would be the first to point out that, if we gave the rigid definition that he referred to in the Bill, it might well be that things had moved on in such a way as to render the definition irrelevant and inappropriate almost as soon as the Bill came into force. I emphasise again that it is right that the Government address themselves to this issue in terms of the sustainable functions. I am not prepared to accept the noble Lord's kind invitation to give a definition of sustainable development at this time.
	The noble Lord, Lord Greaves, also raised the question of the responsibility of the approving body for the SUDS. I emphasise here that we think that we have got it right. We have consulted fully on this. We know why we want the county councils to have their wider responsibilities under the lead local flood authority role in Part 1 of the Bill. That was debated fully in the other place. I heard noble Lords say that more time could have been made available there, but there was considerable debate on all the crucial issues, as there certainly was on this one. I recognise that we are bound to return to it because the noble Lord, Lord Greaves, indicated his intention to do that. The noble Lord, Lord Tope, followed that in his wind-up speech, and I take on board the fact that I have not heard the last of the issue in the context of this Bill.
	I emphasise to the noble Lord, Lord Cameron, who raised some fundamental questions, that Clause 22 provides for the Environment Agency to set out the boundaries for the new regional flood and coastal committees, which will be able to take account of hydraulic catchments and other considerations. I understand the point that has been made about the catchment areas, but it is the task and ability of the Environment Agency to take that into account in its broad strategies. I also appreciated the point that the noble Lord made about the guidance on soft engineering techniques. We envisage that the national strategy produced by the Environment Agency will set out the range of approaches to be used in managing flood and coastal erosion risks. The draft national strategy is expected to be published for public consultation in the autumn. We have a great deal of work to do before then, but we will address the point that the noble Lord raised.
	I hope that the right reverend Prelate the Bishop of Exeter feels that I gave him an adequate response when I spoke earlier about the important point that he raised on costs. We will be able to control the issues in that area.
	The noble Earl, Lord Selborne, raised the issue of mapping, which worried me a little. He is absolutely right to say that the issues regarding revenue flows for the Ordnance Survey are still to be resolved. The issue of the availability of maps for the work involved in relation to the Bill is very important. We are concerned to set up a business model for the Ordnance Survey that makes it viable, and there must be a sustainable long-term funding mechanism for its process. That issue must be resolved given that the necessary maps will be used by the bodies empowered under the Bill. I am grateful to the noble Earl for raising the issue.
	My noble friend Lord Giddens dramatically introduced wider issues regarding climate change. He was a little unfair on the insurance industry, as the noble Lord, Lord Sheikh, helped to inform the House. The principles that he suggested go a long way back-a decade or so-were in fact updated in 2008 following a joint review. We have improved our understanding of flood risk by assessing the probability and consequences of flooding, and we published a new national flood risk assessment in June 2009. Our understanding of risk from service water is improving and service water vulnerability maps are provided to local resilience forums and local authorities.
	I was of course extremely grateful to the noble Lord, Lord Sheikh, who identified just how much progress must be made on the issue of insurance, which my noble friend Lord Giddens indicated was one of his key concerns. Inevitably we will have to address this matter against the background of the climate change factors that will have to be considered. I should emphasise that the Government are fully charged on that point, within the context of that framework. I am not sure that I can go quite as far as the noble Lord, Lord Redesdale, who suggested that there should be a statement at the start of every Bill in this area, but we would be failing in our duty if we did not accept the principle that he adumbrated and which my noble friend Lord Giddens had already identified.
	I have nothing to say to the noble Baroness, Lady Byford, about fly-tipping, except to say that, like her, I lament its occurrence. It is never anything less than a blight on our landscape. It is dangerous in the countryside, and perhaps not quite as harmful in the towns, but we deplore the practice in any environment. Although I accept what she says, I have no immediate legal solution. As she knows, it is illegal and there are significant penalties for those who fly-tip. However, when there are complaints from the farming community, there is always a difficulty in identifying the culprit. That is a real danger. The noble Baroness has also played her part in expressing concern about the scouts and guide associations, and I assure her that we have taken that matter on board.
	The noble Duke, the Duke of Montrose, asked about the delayed recommendations, including matters such as the national emergency framework. We are working on that. Every noble Lord has been kind enough to say which areas of the Bill they support in broad principle. However, it is accepted that the legislation is not all-encompassing, as that would extend it to a size that would immediately bring complaints from some sections of the Opposition about it being too large. The noble Duke mentioned several factors that I understand entirely would have led to a much lengthier and more extensive Bill. He referred to the 1991 Act consolidating the water industry. We currently have no plans to do that but further water legislation will be required to bring about reforms recommended by Anna Walker and Martin Cave, to whom I referred earlier. We explored at that time whether it would be appropriate to introduce the consolidation measure about which the noble Duke advised us to think seriously. I hope he feels that we have indicated our response on the definition of the lead local flood authority. If I have not answered that question well enough, I am grateful to noble Lords who have spoken on behalf of the Environment Agency and its role and subsequent definition.
	As I said, I am grateful to the noble Lord, Lord Sheikh for his unique contribution on the insurance industry. I do not have the slightest doubt that it is of the greatest importance and that we need to make progress.
	I have heard of the elephant in the room, and whenever I think of the elephant in the Chamber, I always think that, for Ministers, there are usually several of them. The one that was articulated gently today but which is of greatest concern is the question of funding. Funding is outwith the Bill and there is no reason why it should have the allocation of resources within it. However, I can give noble Lords an assurance. We have not introduced the Bill against any background other than our clear realisation that, when putting obligations on other agencies-the Environment Agency, and particularly local government in terms of county and district councils-they will have made it clear that they expect to be fully funded for the additional role to which the Bill enjoins them. We are discussing these issues with them and can expect no other from the local authorities in these terms. I give an assurance that the Government intend to meet that commitment.
	The Bill is intended not only to receive Royal Assent and be enacted but to be implemented, because we are all aware of the facts. The noble Lord, Lord Taylor, told us that he had visited Cumbria and seen the devastation. One of the features is that defences erected for Carlisle saved that town, but that was not the case for other parts of the north-west, particularly Cockermouth and the surrounding area. We know that we have to have this Bill in place; we know the urgency of it; and I know that all noble Lords appreciate that, which is why broad, principled support has been given to it. I have not the slightest doubt that we are going to have an interesting and exciting time in Committee; I hope, however, that it will be conducive to the Bill reaching the statute book.
	Bill read a second time and committed to a Grand Committee.

Children, Schools and Families Bill
	 — 
	First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Taxation (International and Other Provisions) Bill

Bill Main Page
	Copy of the Bill
	Explanatory Notes

Second Reading

Moved By Lord Davies of Oldham

Lord Davies of Oldham: My Lords, I beg to move that this Bill be read a second time, and indicate the pleasure with which I undertake this obligation.
	The Bill rewrites a number of international provisions, such as the double taxation relief and transfer pricing provisions. In order to help users, it also relocates and, where appropriate, rewrites provisions which would otherwise have been left unhelpfully in the Income and Corporation Taxes Act or one of the Finance Acts. Its main aim is to make the legislation clearer, better structured and easier to use than the source legislation, which is often dense and difficult to follow.
	The Bill has been produced by Her Majesty's Revenue and Customs Tax Law Rewrite Project. It is the final Bill of the project, and follows the success of the project's previous Acts which we have all enjoyed debating in the House on previous occasions, and which rewrote the capital allowances and income tax legislation and the first instalment of the corporation tax provisions. The second and final instalment is included in another Bill which will be with us shortly.
	The Bill has not been certified as a money Bill. It was introduced in Parliament in another place in mid-November last year, and, under the special procedures applying to tax law rewrite Bills, the substantive debate on Second Reading was held in Committee. The Bill then passed to a Joint Committee of the two Houses where it was considered on 11 January. The Joint Committee included among its members the noble Lords, Lord Blackwell and Lord Goodhart, the noble Baroness, Lady Goudie, and the noble Lord, Lord Newton, who I am pleased to see in his place. I pay particular tribute to the work he has done repeatedly with regard to this very significant project, and I have no doubt that he is more relieved than any other noble Lord that we are coming to a conclusion. I also appreciate the work of the noble Baroness's colleague in another place, Andrew Tyrie, who chaired the committee and did sterling work.
	The Bill then passed back to the House of Commons to be debated at Third Reading and is now before us for its remaining stages. Unlike previous rewrite Bills, this Bill is not a money Bill. Accordingly, if given a Second Reading today, it will be committed to a Committee of this House-although I very much hope that noble Lords will take the view that this Bill ought not to be amended, and I hope the noble Lord, Lord Newton, is here to give his benign support to that proposition.
	It is beyond the remit of the project to make any significant changes in tax policy, and so it takes great care to preserve the effect of the legislation. It can, however, make very minor agreed changes-for example, to remove ambiguity, repeal obsolete material or correct minor anomalies. To ensure that any changes made are within the remit of the project, they are considered during an extensive, detailed and thorough consultation process involving the project's consultative committee whose members are drawn from the main tax professional and business representative bodies. We have been grateful to them in the past, too, for the work that they have done. Overall, the work is overseen by the independent steering committee, chaired by the noble Lord, Lord Newton.
	The extensive consultation process that I mentioned involved publication, for public comment, of papers containing almost all the clauses in the Bill, and the Bill was also published in draft form for another round of consultation. An updated version was later published taking account of the consultation responses and the changes made by the Finance Act 2009. Throughout the process, proposed minor changes in the law were specifically drawn to the attention of consultees, and no minor changes in the law were included in this Bill without the considered approval of both the project's committees.
	The Joint Committee of both Houses heard oral evidence from members of the Tax Law Rewrite Project team. It considered and accepted all the government amendments to the Bill, all of which it agreed were of a minor, technical nature, as was entirely appropriate. The Joint Committee concluded that the Bill is a welcome clarification of the existing law and, as a result, it will be easier to use and more accessible to Parliament, the judiciary, informed professionals, business people and other users of the legislation. It was satisfied that the changes to the law in the Bill are of very minor significance, as I mentioned earlier.
	The success of the project in improving the accessibility of tax legislation to users has been borne out by independent market research, which has shown that in the main users of rewritten legislation have warmly welcomed it. It was seen to be of particular help to those newly entering the profession. Consultees have also been positive about the project's work.
	It would be wrong of me to conclude without paying tribute to everyone who has taken part in this work. I sum up by saying that they have been responsible for an extremely worthwhile project with a track record that shows that it makes our direct tax legislation more modern, clearer and easier to use. The Bill maintains the high standards achieved in the project's previous Acts and will make the legislation more accessible to all. Accordingly, I commend the measure to the House.

Baroness Noakes: My Lords, I thank the Minister for introducing the Bill and I am sure that he will join me in rejoicing that we are reaching the end of the road with tax law rewrite Bills. I think that this will be the last one to be completed, as the one relating to corporation tax, which we will debate next week, is a money Bill and will have all its stages taken together. I have not taken part in the proceedings on all of them but it feels as though I have.
	As the Government have already announced, enthusiasm for further rewrite Bills has all but evaporated in the tax professionals community-that community having contributed massively to the success of the project. So, having cost some £37 million in direct costs and taken the best part of 15 years, the rewrite process is coming to an end.
	I remind the House that the project was initially kicked off by my right honourable friend Mr Kenneth Clarke when he was Chancellor of the Exchequer. It was overseen by a steering committee chaired first by my noble and learned friend Lord Howe of Aberavon and then by my noble friend Lord Newton of Braintree, who I am glad to see is in his place this evening. That steering committee was supported by a vastly experienced consultative committee. One way or another, anyone who is anyone in the tax professional world has been involved in this project.
	Of course, we must not forget the Joint Committee on Tax Law Rewrite Bills, to which the Minister referred. The committee was initially chaired by my right honourable friend Mr Kenneth Clarke, until he joined our Front Bench in another place. As the Minister said, his place was taken by my honourable friend Mr Andrew Tyrie. I join the Minister in paying tribute to all those who have laboured on this project over the past 15 years. It has been a very remarkable achievement.
	Noble Lords will, I hope, note the strong Conservative involvement in the rewrite process from its very inception. This is no accident. A simplification of the tax code is an aim that we have long espoused. It is a matter of some regret to us that the past dozen years have seen the average Finance Bill more than double in size, and we now have the longest tax code in the world, which is not a title to be coveted.
	Recent years have seen some of the most complicated tax legislation in our history. Sometimes the tax legislation is introduced in one year and then subjected to major revision and alteration over subsequent years as layers of complexity and obscurity are added. This is usually done in the name of tax avoidance but it is sometimes also due to the well known dangers of legislating in haste. If anyone has any doubt about the complexity of our tax system, they need only open the Bill randomly to see if what is there is easy to understand. I do not doubt that the painstaking way in which tax legislation has been reformulated has genuinely made complex tax law easier to follow but it does not mean that it has made tax law simple by a very long way.
	When preparing for this debate I read annexe 1 of the Explanatory Notes, which explained why 15 small changes to the law were being proposed. The sixth change takes over two pages to explain the horrendously difficult interaction between income tax, capital gains tax, double tax relief and gift aid. This is what happens when good things, known as reliefs, come up against not so good things, like tax payable. These are the easier bits of the tax code. The rewrite project found a way to deal with this point. Its very complexity reinforced my conclusion that our tax code is overcomplex.
	It might be fun but I will not test the Minister's detailed understanding of this Bill. However, I will test him on the Government's attitude to simplification. The Government have not shown any real understanding of the need to simplify the tax code. This is a much bigger project than rewriting complicated tax legislation in easier language. Tax simplification requires a wholly different approach. It requires reliefs to be reduced in number, since it is the so-called abuse of reliefs on which much tax avoidance is based, which has led to the volumes of anti-avoidance legislation. Simplification may also require a general anti-avoidance rule, although opinions are divided on this and such a rule can be very complicated to administer.
	Our own policy, which was developed by my noble and learned friend Lord Howe, who has long promoted tax simplification, has two elements. The first is an office of tax simplification, which would be a permanent office with the task of preparing proposals for simplification on a long-term basis. It would work systemically through the tax code, making proposals for change. The second element, which would start to pay dividends very early, is much better scrutiny of tax legislation through the commitment to introduce tax changes only at the Pre-Budget Report and to allow time for proper scrutiny and consultation before the scrum of the Finance Bill process. A lot of bad Finance Bill provisions have had to have major, and not always successful, changes made during its passage. Earlier scrutiny would avoid much of this. Importantly, our proposals would involve Members of your Lordships' House, who I know contribute much to the careful scrutiny of tax legislation.
	What policies do the Government have for simplification? Wearing my tax anorak, I was initially excited to see that the Government this week launched a tax framework for business. However, I was less impressed when I saw that this framework ran to only two pages and that the principle of simplicity was not exactly a fulsome commitment. It was rather more something to be considered alongside everything else. I do not know whether the Government also plan a tax framework for individuals but, if it is like the business one, it is probably not worth the effort. What is the Government's tax manifesto for the next Parliament? If it is no more than this new business framework, I believe that our tax code will implode if the Government are returned to power.
	We are content with this Bill. The process leading to it was well tried and sound. The Minister in another place gave assurances in response to the prompting of my honourable friend Mr David Gauke that the Henry VIII provisions in Clauses 375 to 377 would be used only in conjunction with the steering and consultative committees, which we are satisfied with.
	This is not the last time that we will see this Bill because, as the Minister said earlier, it is not certified as a money Bill, unlike the Corporation Tax Bill, which we will debate next week. We know that we cannot challenge the Speaker's certificate on a Bill as a money Bill, as we noted on considering the Fiscal Responsibility Bill just before the recess and, equally, we cannot challenge the lack of a certificate on a Bill. I hope we might be allowed a moment of reflection on why this Bill is not a money Bill when set alongside the Fiscal Responsibility Bill debated two weeks ago and the Corporation Tax Bill to be debated next week.
	The distinctions between the Bills are subtle and the Speaker clearly has a hard task in deciding whether to give or to withhold his certificate. I am told that in 1910 there was a proposal for a committee to assist the Speaker in that difficult task and that that committee would have included Members of your Lordships' House. One hundred years ago, those proposals came to nothing and appear not to have been revived since. Perhaps this is a topic to be revisited if we ever see comprehensive reform of your Lordships' House. I do not expect the Minister to respond to that but I shall leave the topic hanging in the air for another day, in another context.

Lord Newton of Braintree: My Lords, perhaps I might intervene briefly in the gap. I declare an interest, to which the Minister has already referred, in that I am the current chair of the steering committee that has overseen the production of this Bill and the Corporation Tax Bill, which I believe is due to be debated next week. Against that background, it is perhaps appropriate at this stage to offer the Minister my apologies for possibly not being able to be present to hear his dulcet tones again on Tuesday next. If I can attend, I shall. It makes me all the more pleased that I am able to be present this evening and to join the Minister in commending the Bill to the House.
	Given the work that has gone into these Bills, and earlier Bills, from the tax law rewrite team and from the parliamentary counsel's office, it is very pleasing to have unanimous support from the Front Benches, subject, of course, to what the noble Lord, Lord Newby, is about to say. To judge from what I see, it appears unlikely that there will be a rebellion by Back-Benchers in any part of the House, including Cross-Benchers and clerics. Therefore, I trust that the House will go along with what the Minister has urged, including his admonition that no one should dare to amend the Bill, as that would break up the whole thing. In my view, it is in such quiet and consensual ways that much good work is done. Let us hope that that remains the case tonight.

Lord Newby: My Lords, the noble Lord, Lord Newton, should have no qualms: I am not about to suggest erudite or stupid amendments to the Bill. I join everyone who has spoken in paying tribute to the team of officials and politicians who have laboured long and hard to produce this calibre of work. Unlike the noble Baroness, Lady Noakes, I was here when the Capital Allowances Bill passed through the House. I was a young man then. She talked about flicking through that Act and how complicated it was. Needless to say, I have not read the Capital Allowances Act in full detail but I flicked through it and noticed one problem that arises with tax law and accretes year after year. The page on which my eyes alighted related to a special capital allowance regime for dredgers. I have no idea why there is such a regime, but at the time there was clearly a good reason for putting in something that related to that very narrow part of our economy. It is that accumulation of good reasons over the years that has helped to make our tax law as complicated as it is.
	As the noble Baroness pointed out, we have had in this Administration an extraordinary enthusiasm for long Finance Bills. From the outside, it almost seemed like a macho desire to outdo the number of pages in the previous Finance Bill, because it reached epidemic proportions. I am delighted that the noble Baroness has such faith in her party as to believe that, were it elected to government, it would be able to do something about that.
	The proposal to have better pre-legislative scrutiny is important. I am not sure that of itself it simplifies things all that much, but it is a welcome proposal. The only proposal for simplification that I know of that would take out hundreds of pages of tax legislation at a stroke is an anti-avoidance rule. Not only would it do that but it would also block off the likelihood of many more hundreds of pages going on to the statute book. Although there are many arguments for and against that, my view is that it is worth doing. It would simplify the law and reduce the scope for further complexity. However, we will see whether a future Government of whatever colour are successful in simplifying tax law. It would be a major achievement for which they would get no credit whatsoever except from the professionals. I hope, however, that they try and are successful. In the mean time, we definitely wish this Bill godspeed.

Lord Davies of Oldham: My Lords, I am grateful to noble Lords for their support, expressed in very differential ways. I perceived the sword of Damocles which the noble Baroness suggested should hang over my head with regard to future action when this Bill goes into Committee. Of course, we have one other piece of legislation to deal with in these terms.
	Let me reassure the noble Baroness, who raised some quite fundamental points, that we are already committed to simplifying the tax system. We are engaging with a wide range of stakeholders in the tax simplification reviews and we have made progress over the past two and a half years with more than 50 changes to the tax system to simplify it. The noble Baroness labours the same point on almost every occasion when we have a substantial finance debate-even when we have a debate like this evening's, which may not be quite so substantial. She has access to World Bank figures so she knows it to be the case, as well as I do, that it takes businessmen 110 hours to comply with the tax system in the United Kingdom, which makes us very well placed. It is longer than that by nine hours in Canada. It is 132 hours in France, 187 hours in the United States, 196 hours in Germany, 334 hours in Italy and 355 hours in Japan. If I were a businessman-I know that the noble Baroness has business at heart-I would rather think that the British tax system compares well with others and should not be berated in quite the way she suggests.

Baroness Noakes: My Lords, I would not like the Minister to get too carried away with the World Bank study. I know his fellow Ministers in another place have recently become rather fond of quoting that particular study. I am sure the Minister has read the detail, as I have. It is based on a hypothetical construct of a hypothetical company, which is then replicated around the world by a firm of accountants known as PricewaterhouseCoopers. It does not represent any actual measurement of actual effort required by companies across a whole spectrum. It is one hypothetical company with a set of characteristics. In addition, the PricewaterhouseCoopers study asked questions about how simple the tax systems were. Unfortunately, those results are not incorporated in the World Bank's overall indicators-so statistics are very nice, but let us not have too much of them.

Lord Davies of Oldham: Of course, I entirely accept what the noble Baroness says about the nature of this piece of research, but I invite noble Lords to consider what the noble Baroness would have made of it had the table been inverted and had the British figures been the worst. I do not have the slightest doubt that, in those circumstances and with such a significant source as the World Bank, she would have berated me with the figures-so she will not mind if I take some delight in quoting them.
	I note also that while the other great promise of the Opposition is always that they are desperately concerned to get rid of red tape and reduce bureaucracy, here is another piece of bureaucracy that they propose to establish, which will no doubt appear in their manifesto-an office of tax simplification, with its sole focus on simplifying the tax system. That is an additional layer of bureaucracy and also an extra cost-but the noble Baroness will discount that as a jaundiced view of Conservative plans from this side of the House. However, we note that there is no simple answer even to the issue of simplification, apart from that proposed by the noble Lord, Lord Newby. His concept of a measure on tax avoidance is a coat that he has trailed on a number of occasions. The general view is that the concept is much easier to express than to deliver.
	Bill read a second time and committed to a Committee of the Whole House.

House adjourned at 8.02 pm.